Japan’s industrial production fell for the fifth straight month last month but looks poised for a rebound as the country’s factories begin to stir.
Output retreated 9.4 percent from a month earlier, with especially steep cutbacks among makers of motor vehicles and general machinery, the government said yesterday. The figure was in line with market expectations and follows January’s record 10.2 percent plunge.
Japan, which had relied on foreign sales of its cars and gadgets to drive economic growth, now finds itself mired in its deepest recession since the end of World War II as consumers and companies around the world slash spending. Data last week showed that the gloom nearly halved exports last month.
The IMF expects the Japanese economy to contract 5.8 percent for this calendar year, though many economists predict it could be far worse. Sentiment in the Bank of Japan’s closely watched “Tankan” business survey is expected to hit its lowest point ever tomorrow.
Compared with the same month last year, industrial production slumped 38.4 percent.
The storm, however, may finally be losing some of its fury. The Ministry of Economy, Trade and Industry (MITI) predicts industrial production will rise 2.9 percent this month and climb 3.1 percent next month.
In response to the unprecedented collapse in global demand, major exporters including Toyota Motor Corp and Sony Corp have moved quickly to adjust. They have reduced shifts, suspended factory lines and announced thousands of job cuts over the past few months.
Their aggressive moves have suppressed inventory levels, which dropped 4.2 percent last month in the second straight month of decline, the ministry said. Manufacturers’ shipments fell 6.8 percent.
“The auto industry is leading the way in reducing cutbacks as inventories fall below optimum level due to high-speed inventory corrections,” Goldman Sachs economist Chiwoong Lee said in Tokyo.
“Production should stabilize at low levels and might even post a small increase for April-June,” Lee said.
Nissan Motor said last month that its inventory levels have dropped low enough to ease domestic production cuts ithis month, although spokeswoman Pauline Kee declined to provide specific goals.
Along with slimmer stockpiles, Japanese exporters are also beginning to see slivers of hope in the US and China — their two biggest markets and the keys to an economic recovery.
US home sales and demand for durable goods rose last month, while Wall Street has staged a strong rally over the last few weeks on optimism over a government plan to rid banks of souring debts.
In China, overall economic growth slowed to 6.8 percent in the fourth quarter from 2007’s stunning 13 percent rise. A 4 trillion yuan (US$586 billion) stimulus planned by Beijing is expected to provide a boost to major companies with public works spending.
BUSINESS UPDATE: The iPhone assembler said operations outlook is expected to show quarter-on-quarter and year-on-year growth for the second quarter Hon Hai Precision Industry Co (鴻海精密) yesterday reported strong growth in sales last month, potentially raising expectations for iPhone sales while artificial intelligence (AI)-related business booms. The company, which assembles the majority of Apple Inc’s smartphones, reported a 19.03 percent rise in monthly sales to NT$510.9 billion (US$15.78 billion), from NT$429.22 billion in the same period last year. On a monthly basis, sales rose 14.16 percent, it said. The company in a statement said that last month’s revenue was a record-breaking April performance. Hon Hai, known also as Foxconn Technology Group (富士康科技集團), assembles most iPhones, but the company is diversifying its business to
Apple Inc has been developing a homegrown chip to run artificial intelligence (AI) tools in data centers, although it is unclear if the semiconductor would ever be deployed, the Wall Street Journal reported on Monday. The effort would build on Apple’s previous efforts to make in-house chips, which run in its iPhones, Macs and other devices, according to the Journal, which cited unidentified people familiar with the matter. The server project is code-named ACDC (Apple Chips in Data Center) within the company, aiming to utilize Apple’s expertise in chip design for the company’s server infrastructure, the newspaper said. While this initiative has been
GlobalWafers Co (環球晶圓), the world’s No. 3 silicon wafer supplier, yesterday said that revenue would rise moderately in the second half of this year, driven primarily by robust demand for advanced wafers used in high-bandwidth memory (HBM) chips, a key component of artificial intelligence (AI) technology. “The first quarter is the lowest point of this cycle. The second half will be better than the first for the whole semiconductor industry and for GlobalWafers,” chairwoman Doris Hsu (徐秀蘭) said during an online investors’ conference. “HBM would definitely be the key growth driver in the second half,” Hsu said. “That is our big hope
The consumer price index (CPI) last month eased to 1.95 percent, below the central bank’s 2 percent target, as food and entertainment cost increases decelerated, helped by stable egg prices, the Directorate-General of Budget, Accounting and Statistics (DGBAS) said yesterday. The slowdown bucked predictions by policymakers and academics that inflationary pressures would build up following double-digit electricity rate hikes on April 1. “The latest CPI data came after the cost of eating out and rent grew moderately amid mixed international raw material prices,” DGBAS official Tsao Chih-hung (曹志弘) told a news conference in Taipei. The central bank in March raised interest rates by