Tue, Jul 31, 2012 - Page 15 News List

Japanese factory output fell unexpectedly in June

AFP, TOKYO

Japan’s factory output turned down unexpectedly last month, official data showed yesterday, stoking concerns that turmoil overseas is damaging a recovery in the world’s third-largest economy.

Industrial production last month edged down 0.1 percent from the previous month, the Ministry of Economy, Trade and Industry said. It was smaller than a revised 3.4 percent fall in May, but well short of market expectations for a 1.6 percent rise.

Underlining the downward trend, data also showed that factory output declined 2.2 percent in the April-to-June quarter from a year earlier.

“Industrial production appears to be flat [last month],” the ministry said in its monthly report, downgrading its earlier assessment in May, which said production was on a recovery path.

The decrease was largely due to falling output from automakers and other transport equipment manufacturers, the electronics industry, and the iron and steel sector, it said.

A survey of manufacturers released with the production data was mixed, with firms expecting factory output to rise 4.5 percent last month and fall 0.6 percent next month.

The latest figures came after central bank and government officials said Japan’s economy appeared to be gaining traction, although they warned that weakness in Europe was the biggest threat to any recovery.

Monex chief economist Naoki Murakami said Japanese manufacturing was not in as bad condition as the headline index suggested, but “there are signs that US-bound automobile exports that had led the production until early spring began to lose steam.”

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