Industrial production in Japan contracted a seasonally adjusted 1.2 percent on month in July, the Ministry of Economy, Trade and Industry said in Friday's preliminary reading.
That was well shy of forecasts for an increase of 1.7 percent following the 0.4 percent gain in June.
On a yearly basis, production was down 1.0 percent - again missing expectations for a gain of 1.8 percent after dropping 1.5 percent in the previous month.
Upon the release of the data, the METI maintained its assessment of industrial production, saying: "Industrial production appears to be flat."
Before downgrading in June, the METI had said that industrial production was picking up.
Industries that contributed to the decrease in July included electronic parts, general machinery and precision instruments. Commodities that contribu8ted to the decline include metal oxide semiconductor ICs, steam turbine parts and LCDs.
According to the survey of production forecast in manufacturing, production is expected to increase 0.1 percent in August but then decrease 3.3 percent in September.
Industries that contribute to the increase in August include electronic parts, general machinery and paper. Industries that mark the fall in September include transport equipment, communications equipment and general machinery.
Shipments were down 3.6 percent on month in July, falling for the third straight month. They were also down 2.3 percent on year, thanks to transport equipment, electronic parts and general machinery.
Inventories were up 2.8 percent on month, rising for the first time in three months. They were also up 9.3 percent on year thanks to electronics parts, communication electronics equipment and electrical machinery.
The inventory ratio was up 3.8 percent on month in July, rising for the second consecutive month. It was also up 10.0 percent on year.
Also on Friday:
• Japan's core inflation rate came in at -0.3 percent on year, the Ministry of Internal Affairs and Communications said- exactly as expected and slowing from -0.2 percent in June. Overall inflation was -0.4 percent on year, missing forecasts for -0.3 percent after showing -0.2 percent in the previous month. On month, core CPI was -0.2 percent and overall inflation was -0.3 percent.
Core CPI for the Tokyo region - considered a leading indicator for the nationwide trend - was -0.5 percent in August. That beat forecasts for -0.6 percent, which would have been unchanged from the July reading. Overall Tokyo inflation was down 0.7 percent on year, matching forecasts and up from -0.8 percent in the previous month. On month, Tokyo core inflation was up 0.2 percent, while overall CPI was up 0.1 percent.
• Japan's unemployment rate came in at a seasonally adjusted 4.3 percent in July, the Ministry of Internal Affairs and Communications said- in line with expectations and unchanged from the previous month. The number of employed persons was 62.77 million, while the number of unemployed was 2.88 million.
The participation rate was 59.2 percent, easing from the downwardly revised 59.3 percent in June (originally 59.4 percent). The job-to-applicant ratio was 0.83, matching forecasts and up from 0.82 in the previous month.
• Average household spending in Japan was up 1.7 percent on year in July, the Ministry of Internal Affairs and Communications said, standing at 283,295 yen. That beat forecasts for an increase of 1.2 percent following the 1.6 percent gain in June. The average of monthly income for workers' household was up 2.2 percent on year, while consumption expenditures added an annual 1.5 percent to 312,592 yen.
Among the individual components, spending on transportation spiked 18.7 percent on year, while housing spending jumped 10.9 percent and medical care climbed 6.3 percent. Spending on culture and recreation was down an annual 10.7 percent.
• The Nomura/JMMA Manufacturing Purchasing Managers' Index came in with a score of 47.7 in August, remaining below the 50 level that separates expansion from contraction. The index was at 47.9 in July.
• Upon the release of the data, the Japanese yen edged higher at 78.53 against the U.S. dollar, 81.81 against the Swiss franc, 98.23 against the euro and 124.0 against the pound. The yen was also trading higher against the commodity dollars, rising as high as 80.75 against the Australian dollar, 62.65 against the New Zealand dollar and 79.11 against the Canadian dollar.
by RTT Staff Writer
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