Japan’s industrial output increases in August

| September 30, 2011 | 0 Comments

Japan’s industrial output recovered further last month after a record drop in March due to the earthquake and tsunami.

Disruptions caused by the twin disasters resulted in carmakers being forced to halt production as a result of parts shortages.

However, it looks as if the situation continues to improve after output rose by 0.8% last month compared with July, figures from the Finance Ministry showed today.

August represented the fifth consecutive monthly increase but was lower than analysts had expected.

However, the outlook remains uncertain as the yen continues to strengthen, and threatens the recovery of the world’s third largest economy.

A strong yen makes Japanese exports more expensive to overseas buyers.

The currency has been appreciating for some time as global investors see it as a safe haven at a time of economic uncertainty.

However, it has implications and it is forcing manufacturers to consider relocating and some have even suggested moving their operations overseas.

The Government announced it will continue to monitor foreign exchange traders’ positions in order to deter currency speculation – which is the latest intervention by the Government as it seeks to weaken the currency.

In related news this week, Japan’s retail sales slumped last month, which has led many analysts to question the strength of the recovery.

Retail sales fell 2.7% in August on an annual basis – much worse than the 0.6% expected by analysts.

In other news, Japan’s core consumer price index (CPI) rose 0.2% in August on an annual basis, and was up 0.1% compared with July, official data showed today.

Analysts had been expecting an annual rise of 0.1%.

In the meantime, the country’s unemployment rate fell to 4.3% from July’s 4.7% - forecasts were for the rate to remain unchanged.

In comparison, unemployment in the US stands at 9.1%, the UK’s rate is 7.9%, while in the euro zone, it is 10%.

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