Thursday, 30 September 2010

Japanese industrial production falls again

The Bank of Japan's latest Tankan survey provided a mixed picture of the Japanese economy. From AFP/CNA:

Japanese business confidence has improved for a sixth straight quarter but companies are looking ahead with caution amid increased global economic uncertainty, the Bank of Japan said Wednesday.

Sentiment among major manufacturers rose to a higher-than-expected reading of eight in September from one in June, according to the central bank's closely watched Tankan survey of more than 11,000 firms...

But the forecast for the December survey is for a reading of minus one, suggesting that companies expect conditions to worsen in the months ahead as Japan remains beset by deflation and a strong yen.

More worrying, perhaps, was a report that Japanese industrial production fell again in August. AFP/CNA reports:

Japan's industrial output slipped for a third consecutive month in August, official data showed Thursday, indicating that a fragile export-led recovery is continuing to lose steam.

Output fell 0.3 percent in August, the Ministry of Economy, Trade and Industry said, the figure missing expectations of a 1.1 percent rise...

The trade ministry said it expected production to fall 0.1 percent in September and 2.9 percent in October.

Confirming the weakness in Japanese manufacturing is another report showing that the Nomura/JMMA Manufacturing Purchasing Manager Index fell to 49.5 in September from 50.1 in August.

In contrast, China's manufacturing PMI rose in September. AFP/CNA reports:

Manufacturing in China hit a five-month high in September as production and new orders rose, according to an independent survey published Wednesday.

The HSBC China Manufacturing PMI, or purchasing managers index, rose to 52.9 up from 51.9 last month.

The eurozone economy also appears to be holding up well. From Bloomberg:

European confidence in the economic outlook unexpectedly improved this month as executives and consumers weathered tougher government budget cuts by countries struggling to convince investors that they won’t need external aid.

An index of executive and consumer sentiment in the 16 euro nations rose to 103.2, the highest since January 2008, from a revised 102.3 in August, the European Commission in Brussels said in an e-mailed statement today. That compares with economists’ forecast for a decline to 101.3, based on the median of 28 estimates in a Bloomberg News survey.

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