In June, industrial production declined 0.1% over the previous month in seasonally adjusted terms, following the revised 3.4% drop observed in May (previously reported: -3.1% month-on-month). Moreover, the reading contrasted the 1.6% rise expected by the market and represented, in fact, the third consecutive monthly fall. On an annual basis, industrial production decreased 2.0% in June, which contrasted the 6.0% expansion observed in May and marked the lowest print since December 2011. According to the Ministry of Economy, Trade and Industry, the industries that mainly contributed to the monthly deterioration were transport equipment, electrical machinery as well as iron and steel. Owing to the monthly drop, the government downgraded its assessment on Japan's industrial production, stating that "output appears to be in a flat trend." Despite the negative June reading, according to the Survey of Production Forecast, manufacturers are becoming more upbeat and now see industrial output increasing 4.5% month-on-month in July, which represents an improvement compared to the 2.4% rise expected in the previous month's survey. However, manufacturers foresee a 0.6% drop in August. Given the weak growth rates seen in recent months, the trend is now pointing down, with annual average growth in industrial production slowing from 1.8% in May to 1.7% in June.
Industrial production contracts unexpectedly in June
July 30, 2012
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Japan Industry Chart
Note: Month-on-month changes of seasonally adjusted industrial production and year-on-year growth rate in %.
Source: Ministry of Economy, Trade and Industry (METI) and FocusEconomics calculations.
Japan Economic News
October 12, 2016
Core machinery orders (a leading indicator of capital spending over a three- to six-month period) declined for the first time in three months in August.
October 4, 2016
Consumer sentiment rose from August’s 42.0 to 43.0 in September.
October 3, 2016
According to the Bank of Japan’s quarterly TANKAN business survey, sentiment among large manufacturers was stable at 6 in Q3.
September 30, 2016
In August, industrial production expanded 1.5% over the previous month in seasonally-adjusted terms, which contrasted July’s 0.4% decrease (previously reported: 0.0% month-on-month).
September 30, 2016
In August, the core consumer price index was flat compared to the previous month, which was above the 0.2% decline in July.