The World Economy... - 30/6/2010

Today’s Highlight - Japan’s Economy Showing Signs Of Weakness But Will Likely Continue To Expand

Japan’s industrial production fell by 0.1% mom in May, compared with +1.3% in April. This was the first decline in three months, a sign that the country’s economic recovery may slow, as industrial activities have turned weaker on the back of a m-o-m decline in exports during the month. As a result, companies accumulated stockpiles at the fastest pace in more than five years during the month, the Trade Ministry said. Still, companies indicated that they plan to increase production by 0.4% in June and +1.0% in July, indicating that industrial activities will likely remain resilient in the near term. The decline in May’s industrial production was due to a drop in the production of transport equipment and aslowdown in the production of fabricated metals and general machinery. Some blamed it on recall problems at Japanese auto makers and recent strikes at factories in China. These were, however, mitigated by a pick-up in the production of electrical machinery, information electronics and electronic parts & devices. Yoy, industrial production slowed down to 20.2% in May, from +25.9% in April and a high of +31.8% in March. This was the second straight month of easing, suggesting that industrial activities are losing momentum.

The World Economy...- 30/6/2010