"On average, (factory) output remains on an upward trend, helped by brisk external demand and the weaker yen. So you don't have to worry too much about the declines in a single month"
- Yoshiki Shinke, chief economist at Dai-ichi Life Research Institute
Japan released worse-than-expected economic data, underscoring the challenges the government faces as it struggles to kick-start the world's third-largest economy. Japanese factories showed unexpectedly weak performance, with industrial production declining 3.3% from the previous month, falling for the first time in five months, the Ministry of Economy, Trade and Industry said Tuesday. The headline figure was against analysts' forecasts, who called for a decrease of 1.5% following the 1.9% jump in May. On an annual basis, industrial output contracted 4.8%, also missing expectations for a 2.6% drop after the 1.1% fall a month earlier. Analysts said that the decline was likely to be temporary and projected that production would rebound in the coming months. Industries that contributed to the contraction included transport equipment, business oriented machinery, electronic parts and devices.
In addition to that, a separate report showed that household spending missed analysts expectations, falling 0.4% from the previous year. Economists believed that even though the data was weaker-than-expected, it was not a cause for immediate concern.
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