Japan: The Government forecasts a decline in Industrial Production in July

The latest Japanese government forecasts for industrial production for the month of July anticipate a drop in activitywhile noting that industrial production is fluctuating, according to a Reuters story published early on Thursday.

The manufactures surveyed by the Ministry of Economy, Commerce and Industry revealed a month-on-month drop of 2.0% in Industrial Production in Julyagainst market expectations of -1.4% and 2.4% from the previous reading.

It should be noted that the government report also sees a seasonally adjusted production increase of 2.6% m/m in August (versus previous forecast of 1.1%) and 2.4% in September.

Besides, July Japanese retail trade improved to 6.8% yoyversus 5.4% forecast and 5.6% prior (revised).

Comments from Japanese officials

Following the data and forecasts, a Japanese government official has stated that factory output in August is at risk of falling short due to the global economic downturn.

The official also mentioned the need for careful monitoring, citing a drop in both internal and external demand in July.

In addition, the Japanese government official also points out the Dire outlook for chip-making machinery due to weak foreign demand.

“Unless the Chinese economy recovers, production in Japan would be weak“adds the diplomat from Tokyo.