— See Separate Table For Details of Individual Forecasts

TOKYO (MNI) – Japanese industrial production appears to have posted
a fourth straight month-on-month rise, up 1.3% in July, but the pace of
growth decelerated on slower global growth, according to the median
forecast of analysts surveyed by Market News International.

The Ministry of Economy, Trade and Industry will release the data
at 0850 JST on Wednesday, Aug. 31 (2350 GMT Tuesday).

The consensus call is lower than a 2.2% rise for July forecast by
manufacturers surveyed by the METI, and slower than the revised 3.8%
increase recorded in June in light of a slowdown in overseas economies
and domestic power supply constraints.

The Bank of Japan’s real export index rose a seasonally adjusted
0.3% m/m in July, slowing from +7.9% in June and +4.3% in May.

Demand for electricity from major industrial users in Japan fell
4.7% on year in July, with the pace of decline accelerating from -2.8%
in June, after the government urged businesses and households to slash
electricity consumption amid fears of power supply shortages.

Economists said the index of industrial production in July probably
failed to recover to a pre-quake level of 97.9 (against 100.0 for the
2005 base year) seen in February. It stood at 92.6 in June.

According to the latest survey by the METI, July output is expected
to have been boosted by information and communication electronics
equipment, transportation vehicles (automobiles) and electric machinery.

Output of information and communication electronics equipment
appeared to have risen 18.5% m/m in July, compared with +15.0% in June,
while that of transportation vehicles is forecast to have increased 4.6%
in July, down from +19.5% in June, according to the METI.

Looking ahead, economists are closely watching the outlook for
August and September, which will be released with the July output data.

Takehiro Sato, chief economist at Morgan Stanley MUFG, said the
July-September output is likely to show a large gain from the previous
quarter, but that slower global economic growth is expected cap output
growth in October-December.

skodama@marketnews.com
** Market News International Tokyo Newsroom: 81-3-5403-4838 **

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