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In April this year, Japan's industrial production increased 0.2 percent from the previous month, showing an increase for the second consecutive month. Domestic industrial output showed an increase of 13.4 percent from April in the previous year, according to the preliminary Indices of Industrial Production report published by Japan's Ministry of Economy, Trade and Industry.
In April, the Japanese iron and steel production index increased 5.5 percent year on year, while Japan's seasonally adjusted iron and steel production index decreased 1.7 percent in April compared to March. Meanwhile, in April Japanese producers' iron and steel shipments rose by 2.2 percent and iron and steel inventories were down by 2.4 percent, both compared to the previous month.
Meanwhile, economists said that Japan's industrial production rose less than forecast in the month in question, stating that China's slowing economy and Europe's debt crisis will weigh on Japan's fragile recovery. China, the world's second-largest economy and Japan's biggest trading partner, is on course this year to show a slower growth rate, according to the economists' estimates. The European debt crisis and concerns that Greece may exit the euro are increasing demand for the yen as a haven, pushing the currency back toward the record high of 75.35 against the dollar reached last October. A stronger local currency erodes the value of overseas earnings and Japanese companies' global competitiveness.
According to the ministry's Survey of Production Forecast in Manufacturing, Japanese industrial production is expected to decrease 3.2 percent in May and to increase 2.4 percent in June, both month on month. On the other hand, economists said the risks from Europe's debt crisis and a rising yen give reason to be cautious about the pace of Japan's recovery.