Japan’s industrial production rose 2% in June – Observer

Japan’s industrial production index rose 2% in June from the previous month, according to preliminary data released this Monday by the Japanese Ministry of Economy, Trade and Industry.

This increase in the index follows the a monthly contraction of 1.6% recorded in May, according to revised data from the ministry, which indicates in its most recent report that Japanese industrial production “shows signs of increasing at a moderate pace”.

Still, the index retreated 0.4% compared to the same month of 2022.

The sectors that contributed the most to the monthly increase in Japanese industrial production in June were vehicle manufacturing, electronic appliances and general-purpose and business machinery.

On the other hand, the most significant falls were recorded in the production of electrical machines, electronic information and communication equipment, production machines and oil and coal derivatives.

According to a survey carried out by the ministry, Japanese companies fear that industrial production will fall by 0.2% in July, a forecast that is still more optimistic than the one made in the previous survey, which predicted a fall of 0.6%.

As for August, the index should grow 1.1%, according to the most recent survey.

On Friday, the Bank of Japan promised to continue to apply “patiently” the economic stimulus policy, which includes negative reference interest rates (-0.1%).

However, the Japanese central bank’s monetary policy board decided that interest rates on 10-year government bonds could rise by up to 1%, in a decision that could anticipate future increases in reference interest rates.