-Hidenobu Tokuda, senior economist at Mizuho Research Institute
Japan's industrial output rose more than initially estimated in June, the final data from the Ministry of Economy, Trade and Industry revealed. Nevertheless, concerns over the increasing likelihood of a slowdown in Japan's economy in the three months through June persist. Total production of Japan's mines, manufacturers and utilities increased 1.1% on month in June, compared with the 0.8% rise the preliminary result showed. In May, industrial output declined 2.1% as weak exports hurt production in recent months. Measured on an annual basis, production increased 2.3% in June, up from a 2.0% gain in the preceding month.
A separate report showed demand for core machinery orders dropped steeply in June, suggesting a sharp decline in business investment over the measured month and reinforcing the view that the world's third biggest economy shrank last quarter. Machinery orders, excluding ships and utility items, plummeted 7.9% on month in June, the Cabinet Office reported, compared with the 5.3% decrease expected by economists. The sharp fall in June followed the 0.6% increase in orders in the preceding month and the 3.8% rise in April. Measured on a quarterly basis, core machinery orders were 2.9% higher in the three months through June, and are expected to climb 0.3% in the September quarter.
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