Japan’s industrial output up, but export demand to slow
The latest data from
Japan's Ministry of Economy, Trade and Industry (METI) show that after a fall of 0.2% in March,
Japan's industrial output rose an expected 2.2% month on month in April.
Sluggish growth in exports offset the gains in output and jumbled the forecasts for the coming months, however. METI projects a 2.3% fall in industrial
production for May followed by a 1.4% rise in June.
Strong domestic and overseas demand for vehicles and for machinery to produce flat panel displays and semiconductors contributed to April's increase.
The May
production index is expected to fall because April's strong demand for new vehicle and computer models did not carry over.
Economists are concerned about the weak forecast for May since it cancels out the April gains. However, they are quick to point out some positive signs, such as a 1.2% fall in the inventories-to-shipments ratio as well as progress in companies' efforts to cut stockpiles in information technology-related sectors.
Inventories remained unchanged in April, but shipments rose 2.7%.
The slowing demand for Japanese exports, especially from
China, is another negative factor affecting industrial growth.
Japan's exports to
China rose 4.2% year on year in April after a 5.8% increase in March and a 2.3% decline in January. However, growth has slowed from last year's double-digit rates.