Industrial production in Japan rebounds in August
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August’s print overshot the 0.5% expansion that market analysts had expected.
Core prices were down 0.5% over the same month last year in August, which matched July’s reading.
On the other hand, transport equipment, petroleum and coal products as well as fabricated metals declined in the same month. As a result of August’s reading, the government upgraded its basic assessment of industrial production, stating that output was, "showing signs of increasing at a moderate pace."
On an annual basis, industrial output expanded 4.6% in August, contrasting the previous month’s 4.2% decrease. The print marked the strongest growth since March 2014. Annual average growth in industrial production rose from minus 1.6% in July to minus 1.2% in August.
The Survey of Production Forecast showed that manufacturers are becoming more optimistic. They now expect industrial output to have recorded a month-on-month 2.2% increase in September, which contrasted the 0.7% decrease that was forecast in the previous month’s survey. Manufacturers expect a 1.2% expansion in October.
Forecast panelists see industrial production falling 1.0% in 2016, which is down 0.1 percentage points from last month’s projection. For 2017, the panel expects industrial production to rise 1.6%.
In August, the core consumer price index was flat compared to the previous month, which was above the 0.2% decline in July. The print mainly reflected that lower prices for clothes and footwear as well as for fuel, light and water charges were offset by higher prices for culture and recreation.
Core prices were down 0.5% over the same month last year in August, which matched July’s reading. The print was in line with the result expected by market analysts. Overall consumer prices fell 0.5% in August, which was below July’s 0.4% drop.
Core prices for Tokyo—available one month in advance of the national figures and thus a leading indicator for countrywide inflation—fell 0.5% in September over the same month last year (July: -0.4% year-on-year). ■