Japan could raise interest rates
by Stewart Douglas
Industrial output in the Japanese economy has seen a rare increase in June, according to a survey released today by the Ministry of Economy, Trade and Industry.
The survey shows an increase in output from Japanese industry over the month of June, whilst casting predictions as to the near future growth of Japanese industry.
Over the month of June output has risen by 1.2%, up from May’s negative 0.4% growth, suggesting a quick and large-scale turnaround of Japanese economic fortunes.
The growth in output is the first positive result in Japanese industrial output for over four months. Experts have tried to put the rise down largely to growing demand for consumer electronics worldwide, many of which are solely manufactured within Japan.
Some of the biggest growth came in the steel industry, in which Nippon and JFE, two of the world’s largest steel manufacturers, reported high quarterly sales figures. In addition to strong worldwide demand and prices in the steel market, the number two and four biggest steel makers in the world respectively have posted good results over the last quarter.
Analysts suggest that this growth is set to continue over the next few months, picking up steam as we head towards the end of the year.
The figures projected a rise of 1.8% over the course of July, and a massive 4.9% over the course of August as demand domestically and international remains strong.
The news is expected to prompt an interest rate increase when the Bank of Japan meet in August, as a means of keeping the world’s most efficient economy tightly under control for the time being.
Interest rates have remained solid at 0.5% for a prolonged period of time, although many analysts now fear the economic pressures from such quick growth could lead to counter-measures in the forum of interest rate increases.
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