— Japan July Industrial Output -1.2% M/M; MNI Forecast +1.7%
— METI Forecast Index: Japan Aug Output +0.1% M/M, Sep -3.3%
— Japan July Industry Output Posts 1st Drop In 2 Months
— METI Repeats: Japan Industrial Output Appears To Be Flat
— Japan July Industrial Shipments -3.6% M/M, 3rd Straight Drop
— Japan July Industrial Output Level Lowest Since May 2011
— Japan July Industrial Inventories +2.8% M/M, 1st Rise in 3 Mo
TOKYO (MNI) – Japan’s industrial output unexpectedly fell in July,
as waning effects of subsidies for buying cars are raising concerns that
domestic demand may lose steam while the prospects for an export
recovery remain uncertain, data from the Ministry of Economy, Industry
and Trade showed Friday.
The near-term outlook also turned shaky as overseas economies have
yet to show a clear sign of moving out of the slowdown.
Production at the nation’s factories and mines fell a seasonally
adjusted 1.2% in July from the previous month, the first fall in two
months, while the industrial output index fell to 91.5, the lowest since
89.4 in May last year.
The July headline figure came much worse than the median forecast
for a 1.7% increase in a MNI survey of economists, while it was way
below the 4.5% growth predicted in the previous month’s METI report.
METI’s latest survey of firms’ forecasts showed that overall
production is expected to rise 0.1% m/m in August — revised up from the
0.6% fall estimated in the previous survey — before dropping by 3.3% in
September (first estimate).
Based on the latest data and the outlook for the next two months,
METI maintained its overall assessment, saying that “Industrial
production appears to be flat.”
Shipments posted the third straight monthly drop, hit by weaker
auto exports, while July inventory levels reached the highest in the
current statistics series which date to January 2003.
In July, the output decrease was led by lower production of
electronic parts and devices including semiconductors as well as general
and precision machines.
Output of electronic parts and devices, which are sensitive to
changes in the global economic trend, fell 6.5% last month, the fourth
fall in the past five months.
Semiconductor output slumped due to lower demand for smartphones in
Asia and a decline in demand for TVs in the domestic market, a METI
official told reporters.
Production of general machinery, including market-sensitive
flat-panel making equipment and chip-making tools, fell 3.6% on the
month in July, the first fall in two months.
In addition, output of transportation equipment — mostly
automobiles — fell 0.2% from the previous month, a third straight fall
following a 4.3% drop in June, as the positive effects of revived
government subsidies for buying low-emission vehicles continued to wane.
Automobile sales sagged in most of 2011 after the government ended
subsidies for buying greener cars and trucks in September 2010 but they
had been supported until recently by the resumption of the program in
December last year.
However, the program may now be terminated in August, one month
earlier than expected, as it is running out of money due to high demand.
Compared with year-earlier levels, Japan’s industrial production in
July fell 1.0%, marking a second straight fall, after a 1.5% fall in the
previous month.
Other details from the latest data:
Shipments: July -3.6% m/m Vs. June -0.9%, a third straight fall.
Inventories: July +2.8% m/m Vs June -1.2%, the first rise in three
months.
The inventory-to-shipments ratio: July +3.8% m/m Vs. June +4.2%, a
second straight rise.
tokyo@marketnews.com
** MNI Tokyo Newsroom: 81-3-6860-4821 **
[TOPICS: M$J$$$,M$A$$$,MAJDS$,MT$$$$]
