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xiaodaoyoumeng
June 29 (Bloomberg) -- Japan’s industrial output rose at a pace that
matched the steepest increase in 56 years as companies rebuilt
inventories and the economy started to climb out of its deepest
postwar recession.
Production climbed 5.9 percent in May from a month earlier, the Trade
Ministry said today in Tokyo, the same rate as the previous month,
which was the biggest gain since 1953. Economists surveyed by
Bloomberg predicted a 6.9 percent rise. Factories were still producing
29.5 percent less than last year.
The report adds to evidence the economy resumed growing in the three
months ending tomorrow, following record contractions in the previous
two quarters. Some $2.2 trillion in government stimulus worldwide
propped up demand for Japanese exports and leaner stockpiles allowed
manufacturers to raise output.
“Things are improving at a dramatic speed but you also have to pay
attention to the level,” said Richard Jerram, chief Japan economist at
Macquarie Securities Ltd. in Tokyo. “People don’t appreciate just how
fast this thing is going up, but it will still be a very difficult
operating environment.”
A separate ministry report today showed retail sales fell 2.8 percent
in May from a year earlier, a ninth monthly decline, as a worsening
job market forced households to cut back.
The yen traded at 95.22 per dollar at 8:57 a.m. in Tokyo from 95.19
before the reports were published. The Nikkei 225 Stock Average opened
0.1 percent lower.
Idle Factories
Production has risen for three months running, following a five-month
losing streak that, as of April, left about half of the country’s
factory capacity sitting idle. The largest output gain on record was a
7.9 percent surge that occurred in March 1953, near the end of the
Korean War.
Speculation that the recession is abating helped the Nikkei 225 Stock
Average climb 40 percent since it reached a 26-year low on March 10.
The country’s biggest companies will probably share that sense of
optimism in the Bank of Japan’s quarterly Tankan confidence survey
later this week.
An index of sentiment among large manufacturers will climb for the
first time in a year to minus 43 from a record low of minus 58,
economists predict the July 1 report will show. A negative number
means pessimists still outnumber optimists.
Japan’s economy is likely to grow at a 2.3 percent annual pace this
quarter, according to economists surveyed by Bloomberg, following the
previous period’s record 14.2 percent contraction.
China’s Stimulus
China’s 4 trillion yuan ($586 billion) in government spending is
feeding demand for Japan’s heavy equipment, autos and materials. China
this year surpassed the U.S. as Japan’s biggest export customer.
“The impact of China’s infrastructure building has started to emerge,”
Taizo Kayata, senior executive officer in charge of China operations
at Komatsu Ltd., Japan’s biggest maker of construction equipment.
Kayata said Chinese sales probably grew between 10 percent and 20
percent in June and are likely to gain momentum.
Plastics maker Teijin Ltd. last month resumed full output at its plant
near Shanghai and said it may have to raise domestic output to fill
orders that have swelled because of government incentives that
encourage appliance sales.
The inventory cuts that caused Japan’s production to plunge at a
record pace in the first quarter have also cleared room for companies
to boost output. Nippon Steel Corp., Japan’s biggest mill, raised
production at its biggest domestic mill by about 20 percent this month
as automakers replenished stock.
Still, rising unemployment in the U.S. and Europe may limit the
rebound for Japan’s manufacturers. Nissan Motor Co. Chief Executive
Officer Carlos Ghosn said last week that the U.S. market isn’t
recovering. The company, which is forecasting its second annual loss,
cut domestic production by 36 percent in May from a year earlier.
To contact the reporter on this story: Jason Clenfield in Tokyo at
(e-mail address removed); Tatsuo Ito in Tokyo at (e-mail address removed).
http://www.51orders.com/
matched the steepest increase in 56 years as companies rebuilt
inventories and the economy started to climb out of its deepest
postwar recession.
Production climbed 5.9 percent in May from a month earlier, the Trade
Ministry said today in Tokyo, the same rate as the previous month,
which was the biggest gain since 1953. Economists surveyed by
Bloomberg predicted a 6.9 percent rise. Factories were still producing
29.5 percent less than last year.
The report adds to evidence the economy resumed growing in the three
months ending tomorrow, following record contractions in the previous
two quarters. Some $2.2 trillion in government stimulus worldwide
propped up demand for Japanese exports and leaner stockpiles allowed
manufacturers to raise output.
“Things are improving at a dramatic speed but you also have to pay
attention to the level,” said Richard Jerram, chief Japan economist at
Macquarie Securities Ltd. in Tokyo. “People don’t appreciate just how
fast this thing is going up, but it will still be a very difficult
operating environment.”
A separate ministry report today showed retail sales fell 2.8 percent
in May from a year earlier, a ninth monthly decline, as a worsening
job market forced households to cut back.
The yen traded at 95.22 per dollar at 8:57 a.m. in Tokyo from 95.19
before the reports were published. The Nikkei 225 Stock Average opened
0.1 percent lower.
Idle Factories
Production has risen for three months running, following a five-month
losing streak that, as of April, left about half of the country’s
factory capacity sitting idle. The largest output gain on record was a
7.9 percent surge that occurred in March 1953, near the end of the
Korean War.
Speculation that the recession is abating helped the Nikkei 225 Stock
Average climb 40 percent since it reached a 26-year low on March 10.
The country’s biggest companies will probably share that sense of
optimism in the Bank of Japan’s quarterly Tankan confidence survey
later this week.
An index of sentiment among large manufacturers will climb for the
first time in a year to minus 43 from a record low of minus 58,
economists predict the July 1 report will show. A negative number
means pessimists still outnumber optimists.
Japan’s economy is likely to grow at a 2.3 percent annual pace this
quarter, according to economists surveyed by Bloomberg, following the
previous period’s record 14.2 percent contraction.
China’s Stimulus
China’s 4 trillion yuan ($586 billion) in government spending is
feeding demand for Japan’s heavy equipment, autos and materials. China
this year surpassed the U.S. as Japan’s biggest export customer.
“The impact of China’s infrastructure building has started to emerge,”
Taizo Kayata, senior executive officer in charge of China operations
at Komatsu Ltd., Japan’s biggest maker of construction equipment.
Kayata said Chinese sales probably grew between 10 percent and 20
percent in June and are likely to gain momentum.
Plastics maker Teijin Ltd. last month resumed full output at its plant
near Shanghai and said it may have to raise domestic output to fill
orders that have swelled because of government incentives that
encourage appliance sales.
The inventory cuts that caused Japan’s production to plunge at a
record pace in the first quarter have also cleared room for companies
to boost output. Nippon Steel Corp., Japan’s biggest mill, raised
production at its biggest domestic mill by about 20 percent this month
as automakers replenished stock.
Still, rising unemployment in the U.S. and Europe may limit the
rebound for Japan’s manufacturers. Nissan Motor Co. Chief Executive
Officer Carlos Ghosn said last week that the U.S. market isn’t
recovering. The company, which is forecasting its second annual loss,
cut domestic production by 36 percent in May from a year earlier.
To contact the reporter on this story: Jason Clenfield in Tokyo at
(e-mail address removed); Tatsuo Ito in Tokyo at (e-mail address removed).
http://www.51orders.com/