The industrial production fall prompted the Japanese government to say that industrial production is stagnating
May IP fell at the fastest rate in 3 months
Reuters reports:
- Fears the economy may have contracted in the current quarter
- Exports remain in the doldrums, remain a drag on growth
- Economists are already forecasting much slower economic growth in April-June
- Manufacturers curb production to lower high inventories
- Risk of an economic contraction in the current quarter cannot be ruled out
"We were expecting GDP to be flat in the second quarter, but now there is the possibility it could contract," said Shuji Tonouchi, senior fixed income strategist at Mitsubishi UFJ Morgan Stanley Securities. "Consumer spending and capital expenditure show things won't get much worse, but it will be harder to meet the Bank of Japan's forecasts for economic growth and inflation."
