A blip, or a sign that Japan’s economic rebound from the depths of the 2009 recession, might be running short of oomph?
Figures out yesterday showed that the country’s industrial production fell 0.9% from January, when it jumped a solid 2.7%.
The fall was a bit worse than the market forecast for a fall of 0.5% and ended 11 months of rising output.
Tokyo economists reckon it’s a blip and expect output to resume rising because of the solid recovery in major markets in Asia, such as Korea, Taiwan, Singapore and, of course, China where exports of Japanese cars, car parts, steel, chemicals and consumer goods are surging.
As well, the impact of the Lunar New Year, which was in February, can’t be discounted.
So by that reckoning production and exports should rise strongly when the March figures are produced in a month’s time.
Japanese exports rose more than 45% in February, which was impressive, but they had fallen 49% in February of last year from the same month in 2008.
Factory output has yet to return to the peak set two years ago.
But industrial production in February of last year was off 9.4% from January, when it fell a record 10.2% from December 2008.
Industries contributing to the decrease included transport equipment and information and communication electronic equipment, according to the government report.
According to the ministry’s survey of manufacturers, companies expect output to rise 1.4% in March from February, and then fall 0.1% month-on-month in April.
Separate government reports out yesterday showed unemployment steady at 4.9% from January and a 0.5% fall in household spending from February 2009, which was a little odd seeing retail sales jumped by a surprisingly strong 4.2% from February 2009.
That was the second monthly year-on-year rise in a row after the revised 2.3% gain (preliminary 2.6%) in the year to January, which was the first year on year rise for 17 months.
Retail sales fell 5.7% in February 2009, which was the largest year on year drop in seven years. So retail sales have yet to return to the level they were in early 2008.
Household spending fell 1.6% from January 2010.
But deflation remains strong with the country reporting a 12th month of price declines.
Tomorrow sees the release of the April Tankan survey of big business sentiment from the Bank of Japan.
The forecast is for an easing in the level of pessimism among the country’s major companies in all sectors.
But it will still be negative on the whole, only less so than the March survey.
A key point of interest will be business investment and spending intentions.
They have been very weak in the past year and that has been matched by sharp falls in investment spending surveys.
