Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Japan's April factory output rises on capital goods demand

EconomyMay 30, 2021 10:01PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters. FILE PHOTO: Smoke rises from a factory during the sunset at Keihin industrial zone in Kawasaki, Japan, January 16, 2017. REUTERS/Toru Hanai

By Daniel Leussink

TOKYO (Reuters) -Japan's industrial output extended gains in April as manufacturers benefited from a recovery in appetite for capital goods, especially in key overseas markets.

The world's third-largest economy is expected to grow in the current quarter at a much slower pace than previously thought after the government extended coronavirus emergency measures in Tokyo and other major areas.

Separate data on Monday showed retail sales, a key gauge of consumer spending, surged in April, thanks largely to favourable statistical base effects from a year earlier, when the country was under an even stricter coronavirus curbs.

Official data released on Monday showed factory output grew 2.5% from the previous month in April, as higher production of general-purpose and electrical machinery offset a contraction in cars and transportation equipment output.

The rise in output was better than the previous month's 1.7% gain, but much weaker than a 4.1% advance forecast in a Reuters poll of economists as car production fell largely due to supply issues with semiconductors.

"It confirmed Japan's output has been improving steadily due to export-driven gains," said Ayako Sera, market strategist at Sumitomo Mitsui (NYSE:SMFG) Trust Bank.

"But it's hard to get excited by the overall picture as domestic conditions are very stagnant due to the coronavirus."

Shipments of capital goods such as production machinery to the United States and China rose, a government official said, highlighting growing foreign demand for capital equipment as a global economic recovery picks up.

Manufacturers surveyed by the Ministry of Economy, Trade and Industry (METI) expected output to lose 1.7% in May, followed by a sharp 5.0% rebound in June.

Factory output had posted a surprise increase in March, as a jump in car production helped keep the economic recovery on track. Hopes of a recovery in capital spending at home and in overseas markets and demand for tech-making equipment underpinned the outlook for output.

Some analysts worry that Japan's economy could fall into recession in the current quarter, after the government extended a COVID-19 emergency for Tokyo and other major areas until June 20, which is hurting consumer spending.

After emerging from last year's slump, the economy contracted in the first quarter as a slow vaccine rollout and repeated emergency measures put in place to halt a resurgence of infections dealt a blow to consumption.

In April, retail sales soared 12.0% year-on-year, the government said on Monday, mainly due to statistical base effects but also strong appetite for general merchandise and clothing.

Retail sales, however, shed 4.5% on a seasonally adjusted basis compared to the previous month, as consumer sentiment struggled with the most recent measures to stem a halt in coronavirus infections.

Japan's April factory output rises on capital goods demand
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email