Japanese Industrial Production Up, but Disappoints

Posted on Sunday, November 29, 2009

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Bloomberg reports:

Japan's industrial production rose less than economists estimated in October, undermining the nation's recovery from its deepest postwar recession.

Factory output increased 0.5 percent last month from September, the slowest pace in eight months, the Trade Ministry said today in Tokyo. The median estimate of 27 economists surveyed by Bloomberg News was for a 2.5 percent gain.

The decline, led by automakers and electronics parts companies, adds to concern that the economy may slow once global stimulus spending wanes. Bank of Japan Governor Masaaki Shirakawa and Prime Minister Yukio Hatoyama will meet "soon" to discuss how to address a surging yen and slumping stock market, Chief Cabinet Secretary Hirofumi Hirano said today.

"These are weak numbers," said Junko Nishioka, chief economist at RBS Securities Japan Ltd. in Tokyo. "We've been seeing a V-shaped recovery so far, but the pace is starting to moderate."

Below we see the speed and size of the recovery. While the six month change is still up ~15%, the size of this change has begun to reverse course. While not only indicating that we should not be looking for a "V" shaped recovery, it also puts how large the decline in output really was last Fall.