UPDATE1: Japan Oct factory output rebounds sharply after storm-hit Q3
――Adds details, official comments throughout
TOKYO, NNA - Japan's industrial production and shipments rebounded sharply on month in October after a slump in the July-September quarter caused by bad weather, leading to the first year-on-year drop in inventories in just over a year, preliminary data released Friday by the Ministry of Economy, Trade and Industry showed.
This prompted METI to upgrade its assessment for the first time in 11 months despite the escalating U.S.-China trade dispute. “Industrial production is picking up gradually,” it said, dropping the reference to “some soft spots.”
The index of Industrial Production rose 2.9% on month in October to 105.9, the highest level under the new 2015 base year adopted recently. The increase was led by higher output of general machinery (factory conveyors and boilers), electronic parts and passenger cars.
It was the first month-on-month increase after an upwardly revised 0.4 percent drop in September (-1.1 percent under the 2010 base year), coming in stronger than the median economist forecast for a 1.2 percent rise.
Based on its survey of manufacturers, METI projected that industrial
production would rise 0.6 percent on month in November (revised up from the 0.8 percent drop forecast last month) and gain a further 2.2 percent in December.
Adjusting the upward bias in output plans, METI forecast production would drop 2.1% on month in November, but a METI official said this estimate may be distorted to the downside due to a statistical gap between the 2015 and 2010 base years.
“In October, carmakers increased production to meet domestic demand after bad weather conditions delayed their schedules in September while general machinery makers also raised output for domestic orders,” the METI official said. “Increases were also seen in the production of liquid crystal panels exported to China for smartphones, electronic parts exported to Indonesia and Thailand for digital cameras and condensers shipped to South Korea.”
Industrial output fell 0.4 percent on month in July after heavy rains
hit southwestern Japan, causing a parts supply shortage and a
distribution network breakdown and leading to a decline in transport equipment and production machinery.
After a modest 0.3 percent rebound in August, production slipped 0.4 percent in September, hit by typhoons.