TOKYO (MNI) – Japan’s industrial output posted a second straight
monthly rise in April, albeit at a slower pace than expected, as
exporters foresee a bumpy recovery amid growing uncertainties about
global demand, data from the Ministry of Economy, Industry and Trade
showed Thursday.

Production at the nation’s factories and mines rose a seasonally
adjusted 0.2% in April from the previous month, led mainly by the
continued rise in automobiles following the revival in December of
government subsidies for buying low-emission vehicles.

As a result, the industrial output index increased to 95.8, but it
was still below the pre-disaster level of 98.5 in February 2011.

The April headline figure also came in weaker than the median
forecast for a 0.5% rise in a MNI survey of economists, while it was
below the 1.0% gain predicted in the previous month’s METI report.

METI’s latest survey of firms’ forecasts showed that overall
production is expected to fall 3.2% m/m in May — revised up from the
4.1% drop estimated in the previous survey — before rising 2.4% in June
(first estimate).

If these forecasts are met, April-June industrial output would mark
the first quarter-on-quarter drop in four quarters, down 0.8%.

Based on the latest data and the outlook for the next two months,
METI maintained its overall assessment saying: “Industrial production
has been picking up.”

In April, output of transportation equipment — mostly automobiles
— rose 6.5% from the previous month, the fourth rise in the past five
months, following a 3.0% gain in March.

Compared with year-earlier levels, Japan’s industrial production in
April rose 13.4%, marking a third straight rise.

Despite the gradual recovery in industrial output from the last
year’s soft-patch, economists warn of the drag of possible power supply
shortages during the summer, slowing economic growth in China and the
fallout of the European debt crisis.

The inventory index rose 2.0% on the month to 109.6, the highest
since 109.7 in December 2008, because some cars for exports waited to be
loaded onto ships and demand for semiconductors for computer games and
mobile handsets declined, a METI official told reporters.

Other details from the latest data:

Shipments: Apr +0.9% m/m Vs. Mar +0.5%, a third straight rise.

Inventories: Apr +2.0% m/m Vs. Mar +4.3%, a second straight rise.

The inventory-to-shipments ratio: Apr +6.6% m/m Vs. Mar +4.4%, a
second straight rise.

tokyo@marketnews.com
** MNI Tokyo Newsroom: 81-3-5403-4835 **

[TOPICS: M$J$$$,M$A$$$,MAJDS$,MT$$$$]