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by Staff Writers Tokyo (AFP) Aug 31, 2011
Japan's industrial production rose by a lower-than-expected 0.6 percent in July from the previous month, government data showed on Wednesday. While illustrating the fourth straight month of recovery from the impact of the March 11 earthquake and tsunami that crippled supply chains and led to the shutdown of factories, the data missed expectations of a 1.5 percent gain. The Ministry of Economy, Trade and Industry said that production "was on a recovery trend" following the March disasters, but the July data showed a much slower pace of output than the previous month's 3.9 percent rise. The slower pace coincided with the start of mandatory curbs on peak power consumption for big users in the east and northeast of the country, although analysts said the impact of the 15 percent reduction was not clear. "The 0.6 percent gain was well below our expectations," Hideki Matsumura, an analyst at Japan Research Institute. However, "the recovery pace from the disaster has been quite fast for the past few months, and this slowdown indicates production has entered into a minor adjustment period before full recovery." Leading the gains were increases in automobile production, electronic parts and devices, and machinery. According to producers polled by the government, production was expected to increase by 2.8 percent in August but decrease 2.4 percent in September. Japan's new prime minister Yoshihiko Noda is charged with revitalising an economy that was plunged into recession by the impact of the March 11 disasters and safeguarding a recovery that remains threatened by a soaring yen. Industrial output in the world's third-largest economy remains 2.8 percent below levels from the same time a year ago. The economy saw its third-straight quarter of contraction in April-June, shrinking by an annualised 1.3 percent as exports plunged as tsunami damage to factories in Japan's northeast hobbled supply chains, especially in the crucial auto and electronics sectors. The March 11 earthquake triggered a tsunami that tore into Japan's northeast coast, destroying entire towns and leaving 20,000 dead or missing while sparking meltdowns and explosions at the Fukushima Daiichi nuclear power plant.
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