Japanese Factory Output Shows Improvement in June
Tokyo, Japan – Japanese factory output saw an improvement in June after two months of decline, according to government data released on Monday. This increase in production reflects growing confidence among manufacturers, boosted by strong domestic demand.
Despite concerns of a global recession, many countries, including Japan, are relying on domestic consumption to drive growth. In June, factory output rose by 2 percent compared to the previous month, although it fell slightly short of the 2.4 percent forecast by the market. This follows a 2.2 percent decline in May.
Experts believe that production will continue to grow due to resilient domestic demand, particularly in private consumption. However, the pace of recovery may be moderate due to sluggish export growth caused by a slowdown in overseas economies.
The positive factory output figures align with the improved sentiment among big manufacturers in the second quarter. The Bank of Japan’s “tankan” survey, released on July 3, showed that raw material costs had peaked and the lifting of pandemic restrictions had boosted consumption. However, manufacturers remain cautious about weakening overseas markets, as indicated by the Reuters Tankan poll published on July 19.
The auto-related sector, which represents a significant portion of corporate Japan, saw a 6.1 percent increase in production. Both domestic and international sales were strong, according to a Ministry of Economy, Trade and Industry (METI) official. The production of trucks and parts also contributed to the overall improvement.
Major automakers such as Toyota Motor, Honda Motor, and Nissan Motor reported increased global production in the first half of the year as semiconductor supply improved.
The output of electronic components and devices rose by 6.8 percent, driven by increased shipments of capacitors used in smartphones, according to the METI official.
METI maintained its assessment of industrial output, stating that “production is slowly picking up.” Manufacturers surveyed by METI predicted a 0.2 percent decline in output for July, followed by a 1.1 percent increase in August.
Separate data revealed a 5.9 percent year-on-year increase in retail sales for June, in line with economist forecasts. However, compared to the previous month, retail sales contracted by 0.4 percent.
Overall, the latest data suggests positive growth in Japanese factory output, driven by strong domestic demand. However, manufacturers are cautious about the impact of weakening overseas markets and the ongoing shortage of parts and materials.
