— Japan Sep Industrial Output -4.1% M/M; MNI Forecast -3.4%
— METI Forecast Index: Japan Oct Output -1.5% M/M, Nov +1.6%
— Japan Sep Industry Output Posts 3rd M/M Fall In Row
— METI Cuts View: Japan Industrial Output Now on Downtrend
— Japan Sep Industrial Shipments -4.4% M/M, 1st Fall in 2 Months
— Japan Sep Industrial Inventories -0.9% M/M, 2nd Straight Drop

TOKYO (MNI) – Japan’s industrial output fell 4.1% in September, at a
pace much faster than expected, with the pace of on-month decline accelerating
from -1.6% in August hit by continued global slowdown and weaker domestic
demand, data from the Ministry of Economy, Industry and Trade showed Tuesday.

The near-term outlook for production remains gloomy as overseas demand
for Japanese cars, electronics and machinery, particularly from Europe and
China, has yet to show a clear sign of recovery while the Sino-Japanese
territorial dispute over small islands lingers.

The seasonally adjusted 4.1% drop in production at the nation’s
factories and mines was the largest since -16.2% m/m in March 2011, when the
earthquake disaster caused a major supply chain breakdown.

The industrial production index fell to 86.5, the lowest since April
last year, when it was at 84.5 in the aftermath of the earthquake.

The September headline figure came in weaker than the median forecast
for a 3.4% decline in a MNI survey of economists while it was way below the 2.9%
fall predicted in the previous month’s METI report.

METI’s latest survey of firms’ forecasts showed that overall
production is projected to drop 1.5% m/m in October, instead of a flat growth
estimated in the previous survey before rising by 1.6% in November (first
estimate).

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

Last month, it said that “industrial output appears to be weakening.”

The largest factor behind the September drop was weak demand for cars
in Europe and North America as well as in China where consumers are boycotting
Japanese products over the island row.

The latest industry data also showed that new vehicle sales in Japan
posted the first year-on-year decline in 13 months in September, when the
government terminated subsidies for buying low-emission vehicles.

Output of transportation equipment — mostly automobiles — tumbled
12.6% from the previous month, a fifth straight fall.

In addition, production of general machinery, including mining
equipment, fell 5.0% last month, the first fall in two months.

Compared with year-earlier levels, Japan’s industrial production in
September fell 8.1%, marking a fourth straight fall after a 4.6% fall in the
previous month.

Other details from the latest data:

Shipments: Sep -4.4% m/m, the first fall in two months.

Inventories: Sep -0.9% m/m, a second straight fall.

The inventory-to-shipments ratio: Sep +4.2% m/m, the first rise in two
months.

tokyo@marketnews.com
** MNI Tokyo Newsroom: 81-3-6860-4821 **

–email: msato@mni-news.com

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