Japan’s industrial output falls 2.3% in May
Based on the preliminary data released by the
Japan's Ministry of Economy, Trade and Industry (METI), the country's industrial output dropped 2.3% in May from the month before.
Production in May at
Japan's factories and mines had been expected to drop 2.5%. However, METI had forecast that output would decline by 2.3% month on month.
In April, industrial output rose 1.9% month on month and 0.3% year on year. Industrial output has been falling month on month for seven of the last ten months because of slowing exports, which have been a major driving force behind
Japan's economic recovery.
METI indicates that industrial output will increase 1.7% month on month in June and 1.2% month on month in July.
Following the industrial output news, the Yen fell to an eight-month low against the US Dollar in Asia.
The Japanese currency fell 6.8% this year against the US Dollar as the world's second-largest economy is struggling to emerge from last year's recession.
Under these circumstances, economists believe that
Japan's industrial
production activity will continue to be slack for the remainder of 2005. Furthermore, they added that the expected slowdown in demand in the US and
China will expose a downside risk in the overall
production.