— METI Forecast Index: Japan Apr Output +3.7% M/M, May -0.3%
— METI Repeats: Japan Output Continues To Show Upward Move

TOKYO (MNI) – Japanese industrial production rose 0.3% in March
from the previous month after falling 0.6% in February, backed by demand
for passenger cars and semiconductors, data from the Ministry of
Economy, Trade and Industry released Friday showed.

In March the seasonally adjusted monthly rise came in slightly
weaker than the consensus forecast for a 0.8% rise.

Production has continued to improve from the sharp plunge seen from
late 2008 through early 2009. It rose a record +4.6% m/m in May last
year.

Compared with the year before level, production jumped 30.7% y/y in
March, following a 31.3% rise in February, recovering 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.

The March month-on-month output increase was led by rises in
electrical machinery, transport equipment as well as iron and steel.

Output is expected to show fluctuations in the coming two months.
METI’s survey of firms’ forecasts showed that production will continue
rising by 3.7% in April — a sharp upward revision from the 0.6% rise
estimated in last month’s survey — before falling by a modest 0.3% in
May (first estimate).

Based on the latest data and the outlook for the next two months,
the Ministry of Economy, Trade and Industry (METI) repeated its
assessment adopted in June 2009 that: “Industrial Production continues
to show an upward movement.”

In January-March, industrial production was up 6.7% from the
previous quarter, accelerating from the 5.9% rise in the final quarter
of 2009 and the 5.3% gain in the third quarter of 2009.

The production in the first quarter of 2010 jumped 27.2% from a
year earlier, a reversal from the 4.3% drop in the fourth quarter of
2009 and the 19.4% fall in the third quarter of 2009.

For the whole of fiscal 2009 that ended on March 31, output fell
9.0%, the second straight year-on-year drop, after falling 12.7% in
fiscal 2008 and rising 2.7% in fiscal 2007.

Other details from the latest data:

Shipments: Mar +1.6% m/m vs. Feb -0.2%, the first m/m rise in two
months. The rise was led by increases in iron and steel, transport
equipment as well as electronic parts and devices.

Inventories: Mar -1.6% m/m vs. Feb. +1.6%, marking the first m/m
drop in three months. The decrease in inventory was led by information
and communication electronics equipment, chemicals and general
machinery.

The inventory-to-shipments ratio: Mar -5.2% m/m vs. Feb +0.3%, the
first m/m drop in two months.

tokyo@marketnews.com
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