Japan’s industrial output rose 1.3 percent in April from the previous month, official data showed yesterday, as strong demand from China and emerging Asian nations continue to help buoy the economy.
However, the reading, which was the second consecutive month of growth after rising a revised 1.2 percent in March, missed average market expectations for an increase of 2.5 percent. Shipments gained 1.6 percent from March, the Ministry of Economy, Trade and Industry said, as inventory stockpiles rose 0.3 percent.
The April figure was an increase of 25.9 percent from the previous year, the ministry said.
Saddled with a stagnant jobs market, weak domestic demand and persistent deflation, Japan is reliant on external trade to boost its economy.
Booming exports helped GDP grow by an annualized 4.9 percent in the January-March period. However, figures last week showed unemployment crept higher and household spending drifted lower as core consumer prices continued to fall, illustrating that the manufacturing upswing has yet to filter into the broader economy.
Soaring welfare costs for a graying population and falling prices continue to burden Japan, with consumers deferring purchases in the hope of further price falls.
Data last week however reinforced hopes that exports will drive Japan’s recovery, as April shipments surged 40.4 percent year-on-year. Vehicle shipments more than doubled, indicating a strong second-quarter start for Japan, with exporters eyeing stronger profits in the year ahead.
“Industrial production is expected to keep increasing, albeit at a slower pace than the beginning of this year,” said Atsushi Matsumoto, economist at Mizuho Research Institute.
“Given that emerging countries are set to maintain a very high pace of growth, Japanese exports are likely to grow accordingly and production is expected to keep up.” he said.
However, he said that while Japan’s export sector has not yet been overly affected by the eurozone crisis and its impact on the yen, there was a risk that a European decline may slow key partners such as China, causing a knock-on effect.
In separate news, South Korea’s industrial output grew for the 10th straight month in April in a sign that the economy is bouncing back quickly from the global downturn, official figures showed yesterday.
Production in mining and manufacturing rose 19.9 percent last month compared to the same month a year earlier, Statistics Korea said.
Output growth slowed from March’s revised 22.5 percent, but the numbers have remained strong since they moved into positive territory in July last year.
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