— Correcting 6th Paragraph To have Revised Y/Y Figure
— Japan Industrial Output Posts 2nd Straight M/M Drop; June -1.1%

TOKYO (MNI) – Japanese industrial production fell 0.2% in July,
revised down from a preliminary 0.3% rise, as gains in general machinery
for making flat panel displays and semiconductors turned out to be
outpaced by declines in chemicals and other sectors, data from the
Ministry of Economy, Trade and Industry released on Tuesday showed.

Revised data showed that industrial production posted the second
straight month-on-month decline after a 1.1% dip in June, instead of the
first m/m rise in two months as reported earlier.

METI reported last month its survey of firms’ forecasts showed that
production will rise 1.6% m/m in August — revised down from the 2.0%
rise estimated in last month’s survey — before rising further by 0.2%
in September (first estimate).

Output has gained every month since March 2009 except for the drops
in July (-0.2%), June (-1.1%) and February (-1.1%) this year. The
decline in June was seen as a temporary blip, due in part to distorted
seasonal adjustments caused by the Lehman shock of 2008.

Production has generally improved from the sharp plunge seen from
late 2008 through early 2009. It rose a record +4.6% m/m in May 2009.

Compared with the year earlier level, production in July this year
rose a revised 14.2% y/y (preliminary +14.8), with the pace of growth
continuing to decelerate from +17.0% in June. It has recovered from the
record 38.6% drop in February 2009. The 6.4% rise in December 2009 was
the first y/y gain in 15 months.

Other details from the latest data:

Shipments: July unrevised -0.1% m/m vs. June +0.2% m/m, the first
m/m drop in two months. The drop was led by decreases in transport
equipment, electronic parts and devices as well as iron and steel.

Inventories: July unrevised -0.5% m/m vs. June +0.7% m/m, marking
the first drop in four months. The decrease in inventories was led by
electrical machinery, transport equipment and general machinery.

The inventory-to-shipments ratio: July revised +1.4% m/m
(preliminary +1.5%) vs. June -1.7% m/m, the first rise in two months.

The capacity utilization index: July -0.3% m/m at a seasonally
adjusted 89.1 (vs. 100 = 2005 average) vs. June -2.1%.

tokyo@marketnews.com
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