Japan: Industrial production unexpectedly rebounds
November 30, 2012
In October, industrial production rose 1.9% over the previous month in seasonally adjusted terms, which contrasted both the 4.1% contraction observed in September and the 2.0% drop expected by the market. The reading represents, in fact, the largest rise since December 2011. On an annual basis, industrial production declined 4.3% in October, after contracting 8.1% in September. According to the Ministry of Economy, Trade and Industry, the sectors that contributed to the most to the monthly rise were electronic parts and devices, fabricated metals as well as transport equipment. Despite the monthly rise, the government maintained its assessment on Japan's industrial production, stating that "output is on a downward trend." The Survey of Production Forecast showed that manufacturers are becoming more pessimistic and now see industrial output falling 0.1% month-on-month in November, which contrasts the 1.6% rise expected in the previous month's survey. However, manufacturers forecast a 7.5% rise in December. Despite the positive monthly reading, the trend continues to point downwards, with annual average growth in industrial production falling from 0.8% in September to 0.3% in October.