Japan's June output up 2.4% for longest winning streak in 2 yrs+

TOKYO, July 30 Kyodo -
Japan's industrial output rose a seasonally adjusted 2.4 percent in June from
the previous month, extending the gaining streak to four months, the longest in
some two years, while projections show momentum will ease over the upcoming
months, the government said Thursday.

The index of production at mines and factories stood at 81.0 against a base of
100 for 2005, particularly helped by strength in the electronic devices and
steel industries, the Ministry of Economy, Trade and Industry said in a
preliminary report.
The headline reading almost matched the average market forecast of a 2.5
percent rise in a Kyodo News survey. The output last grew for four months in a
row between May and August in 2007, just before the U.S. subprime mortgage
problems unsettled the global financial market.
As for the April-June period, the index rose 8.3 percent from the previous
quarter to 78.3, registering the second-fastest rate of growth on record. It
rose 8.9 percent in the October-December period in 1953.
The ministry showed optimism by maintaining its basic assessment on the
country's industrial production that says, ''Developments for a recovery can be
seen.'' However, a ministry official said that production level is still low
due to the affects of the worldwide economic slump.
On prospects, the government projected that the production index will gain 1.6
percent in July and 3.3 percent in August, alluding to the pace of output
losing momentum, compared with the 5.9 percent gain in April and 5.7 percent
climb in May.
In June, production by electronic parts and devices makers led the overall
output growth, rising 12.5 percent on robust results of such products as
semiconductor integrated circuits for mobile phones and portable music players.
The iron and steel as well as chemicals industries also put in brisk results,
up 10.1 percent and 3.4 percent, respectively. Transport equipment
manufacturers, including carmakers, saw a 0.7 percent advance.
''Industrial output has been showing a rebound supported by some recovery in
exports and progress in inventory cuts,'' said Eisuke Suzuki, analyst at the
Development Bank of Japan.
But Suzuki said, ''Many aspects remain uncertain, and it is possible the pace
of output growth will become slower,'' warning of potential falls in production
once the favorable impact of the economic stimulus taken by major economies
wears off.
Echoing such a pessimistic view, output by the fabricated metals industry lost
1.3 percent in the reporting month, while petroleum and coal products makers
marked a 1.4 percent decline.
The index of industrial shipments gained 3.5 percent to 81.7 due partly to
robustness of carmakers, which recorded rises in exports to North America and
Europe, the ministry said.
The index of industrial inventories was down 1.0 percent to 95.4 as Japanese
manufacturers have made further progress in their inventory cuts, a sign for
them to gear up production.
For the three months through June, the shipment index gained 6.4 percent to
78.6. Meanwhile, the inventory index slid 4.4 percent to 95.4.
==Kyodo
2009-07-30 22:25:22