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Japan: Industrial production recovery remains

Thu, Oct 29 2009, 11:25 GMT
by Steen Bocian

Danske Bank A/S


• Industrial production in September increased for the seven month in a row and production plans suggest the recovery could pick up some speed in coming months on the back of low inventories and strong exports.

• Today’s industrial production data suggest that Japan’s GDP growth is currently substantial above potential. In line with other Asian data released recently it suggests that the recovery has gained strength in late Q3.

Industrial production appears to be picking up some speed again

Industrial production in September increased 1.4% m/m, slightly more than expected. This is the seventh month in a row with an increase in industrial production and we are now 23% off the bottom reached in February. The details in today’s report are very strong. Shipments surged 3.4% m/m and inventories declined further by 0.5% m/m, resulting in another sharp drop in the inventory-sales-ratio (see charts on next page). Although the inventory-sales-ratio remains high, this suggests that the near-term outlook for industrial production remains very strong.

Published on  Thu, Oct 29 2009, 11:26 GMT

Danske Bank  | Holmens Kanal 2-12, DK-1092 Copenhagen
http://www.danskebank.com/ | danskeresearch@danskebank.com

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