— Japan Oct Industrial Output +1.8% M/M; MNI Forecast -2.1%
— METI Forecast Index: Japan Nov Output -0.1% M/M, Dec +7.5%
— Japan Oct Industry Output Posts 1st M/M Rise in 4 Mths
— METI Repeats View: Japan Industrial Output Now on Downtrend
— Japan Oct Industrial Shipments Flat M/M
— Japan Oct Industrial Inventories +0.3% M/M, 1st Rise in 3 Mths

TOKYO (MNI) – Japan’s industrial output unexpectedly marked the fist rise
in four months in October on higher demand for semiconductors and automobiles
but the economy remains in a slump hit by the global slowodown, data from the
Ministry of Economy, Industry and Trade showed Friday.

Output of chips rose on strong demand for smartphones in Asia while car
production was backed by solid demand in North America and introduction of new
models in Japan, a METI official told reporters.

The ministry’s survey showed that output will rise in December after a
small drop in November while economists expect the Japanese economy to post a
second straight quarter of contraction in October-December as demand in Europe
and China has yet to show a clear sign of recovery while the Sino-Japanese
territorial dispute lingers.

Production at the nation’s factories and mines rose a seasonally adjusted
1.8% in October, as the industrial production index rebounded to 88.1. It fell
to 86.5 in September, the lowest since April last year, when it was at 84.5 in
the aftermath of the earthquake.

The October headline figure came in much better than the median forecast
for a 2.1% decline in a MNI survey of economists while beating the 1.5% fall
predicted in the previous month’s METI report.

METI’s latest survey of firms’ forecasts showed that overall production is
projected to dip 0.1% m/m in November, instead of a 1.6% rise estimated in the
previous survey before jumping by 7.5% in December (first estimate).

Based on the latest data and the outlook for the next two months, METI
repeated its assessment, saying that “industrial output is on a downward trend.”

Output of electronics parts and devices rose 14.7% last month, a second
straight rise, following a 2.4% increase in September, while production of
transportation equipment, including vehicles, increased 1.1%, the the first rise
in six months.

The rebound in output of transportation equipment was due to sales efforts
by carmakers, the METI official said, although the latest industry data showed
that new vehicle sales in Japan fell for a second straight month in October
after making the first annual decline in 13 months in September.

The government terminated subsidies for buying low-emission vehicles in
September, while Chinese consumers boycotted Japanese cars amid the territorial
row.

Compared with year-earlier levels, Japan’s industrial production in October
fell 4.3%, marking a fifth straight fall, after a 8.1% fall in the previous
month.

Other details from the latest data:

Shipments: Oct flat m/m vs. Sep -4.3%, Aug +0.2%

Inventories: Oct +0.3% m/m, the first increase in three months.

The inventory-to-shipments ratio: Oct -1.8% m/m, the first fall in two
months.

–MNI Tokyo Bureau; tel: +81 90-4752-7020; email: yseki@mni-news.com
–MNI Tokyo Bureau; tel: +81 90-4670-5309; email: msato@mni-news.com

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