— See Separate Table For Details of Individual Forecasts

TOKYO (MNI) – Japanese industrial production appears to have risen
by 5.4% in May from the previous month, after rebounding a revised 1.6%
in April and posting a record 15.5% drop in March, according to the
median forecast of economists surveyed by Market News International.

The Ministry of Economy, Trade and Industry will release the data
at 0850 JST on Wednesday, June 29 (2350 GMT Tuesday).

Economists said industrial output is expected to rise for the time
being, thanks to a recovery in production facilities and supply chains
that were wrecked by the March 11 disaster.

Some data have pointed to a steady recovery in May output.

Demand for electricity from major industrial users in Japan fell
3.4% on year in May, improving from -6.2% in April, the Federation of
Electric Power Companies has said.

In particular, power demand from machinery makers, including
automakers and electronics firms, dropped 6.1% in May, with the pace of
decline decelerating from -10.8% in April.

The Bank of Japan’s real export index rose a seasonally adjusted
4.7% in May from April, posting the first month-to-month rise in three
months, following -7.0% in April and -8.0% in March.

Meanwhile, the consensus call by economists for May industrial
output is lower than a 8.0% rise forecast by firms polled by the
Ministry of Economy, Trade and Industry.

According to the METI, May output is expected to be boosted by
automobiles and other transportation vehicles as well as general
machinery.

Output of transportation vehicles appeared to have risen 35.7% m/m
in May, after -1.9% in April and -46.7% in March, while that of general
machinery is expected to have increased 17.0% in May, after +12.0% in
April and -14.5% in March, according to the METI.

Moreover, economists said some manufactures are increasing their
output and inventories ahead of the peak power consumption time in the
summer, when businesses and households in eastern Japan are requested by
the government to slash electricity use in order to avoid a massive
blackout.

Looking ahead, Akiyoshi Takumori, chief economist at Sumitomo
Mitsui Asset Management, said, “Production will recover to pre-quake
levels by the fall.”

The BOJ said in its monthly report for June that industrial
production in the July-September quarter is expected to show a clear
gain from April-June as supply-side constraints are easing.

skodama@marketnews.com
** Market News International Tokyo Newsroom: 81-3-5403-4838 **

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