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TOKYO: Japan said Wednesday that industrial output slid a
worse-than-expected 2.0 percent in June from the previous month,
fanning fears that Asia’s largest economy could be slipping into a
recession.
It was the first decrease in production in two
months, the Ministry of Economy, Trade and Industry reported. Market
forecasts had been for a fall of 1.7 percent after a 2.8-percent
increase in May.
Output in the April to June quarter fell 0.7
percent from the previous three months, the second consecutive
quarterly decline, the ministry said.
The government said industrial production was
softening, downgrading its previous view that output was generally
flat.
The data “is quite bad and suggests that the
Japanese economy is likely slipping into a recession,” said
Takeshi Minami, chief economist at Norinchukin Research Institute, a
private think tank.
“Asian economies won’t be able to continue
to hold up the Japanese economy.”
Output is expected to decrease 0.2 percent in
July and by a further 0.6 percent in August, according to a survey
of manufacturers, the government said.
Japan’s economy has enjoyed a gradual recovery
in recent years from a slump stretching back over a decade.
But there are concerns that the revival might
now stall due to the worsening global economic climate and soaring
commodity costs.
“The sustainability of exports, Japan’s
lifeline, is in danger, with exports to Europe down suddenly,
especially for autos,” warned Morgan Stanley economist Takehiro
Sato, who expects a mild recession in Japan.
Industries that mainly contributed to the
decrease in output in June were transport and general machinery
including semiconductors, the government said.
“After the May rise in auto output, which was
mainly triggered by one-off changes in car models, auto production
in June fell due to slowing demand overseas and at home,” said
Minami at Norinchukin Research Institute.
-- AFP
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