— Japan Feb Industrial Output -1.2% M/M; MNI Forecast +1.3%
— Japan Feb Industry Output Posts 1st Drop in 3 Mths; Jan +1.9%
— METI Forecast Index: Japan Mar Output +2.6% M/M, Apr +0.7%
— METI Says Japan Industrial Output Has Been Picking Up

TOKYO (MNI) – Japan’s industrial output unexpectedly slumped in
February as a temporary boost to make up for the lost production caused
by last year’s supply chain breakdown in flood-hit Thailand has peaked
out, data from the Ministry of Economy, Industry and Trade showed
Friday.

But the METI’s monthly survey of producers showed that output will
rebound in coming months amid brighter signs of global growth.

Production at the nation’s factories and mines fell a seasonally
adjusted 1.2% in February from the previous month after surging 1.9% in
the previous month. This pushed down the industrial output index to
94.1, below the pre-disaster level of 97.9 in February 2011.

The February headline figure came in worse than the median forecast
for a 1.3% rise in a MNI survey of economists, while it was also below a
1.7% gain predicted in the previous month’s METI report.

METI’s latest survey of firms’ forecasts showed that overall
production is expected to rise 2.6% m/m in March — revised up from the
1.7% gain estimated in the previous survey — before increasing 0.7% in
April (first estimate).

Based on the latest data and the outlook for the next two months,
METI basically maintained its overall assessment saying: “Industrial
production has been picking up.”

In the previous month, it asserted that “industrial output is
showing signs of picking up.”

In February, output of general machinery, including semiconductor
processing equipment, fell 4.5% as major makers such as Canon and Nikon
continued to paced down replacement production following the major
flooding in Thailand.

Output of transportation equipment (mostly automobiles), which was
also hit hard by the Thai supply chain breakdown, fell 2.6% from the
previous month, marking the first decline in three months.

But output is expected to be supported by an export-led economic
recovery. The latest data have shown that Japan unexpectedly logged the
first trade surplus in five months in February on brighter North
American growth prospects and solid demand from Southeast Asia.

Inventories of electronic parts and devices fell in February as
manufacturers trimmed excess inventories and thanks to steady demand for
cell phones in Asia, a METI official told reporters.

Compared with year-earlier levels, Japan’s industrial production in
January rose 1.5%, marking the first rise in four months.

Other details from the latest data:

Shipments: Feb +1.1% m/m Vs. Jan -0.9%, the first rise in two
months.

Inventories: Feb +0.1% m/m Vs. Jan +3.0%, a second straight rise.

The inventory-to-shipments ratio: Feb -3.9% m/m Vs. Jan +1.4%, the
first fall in two months.

tokyo@marketnews.com
** MNI Tokyo Newsroom: 81-3-5403-4835 **

[TOPICS: M$J$$$,M$A$$$,MAJDS$,MT$$$$]