Japan industrial production remains flat in July, misses market estimates

Industrial production in Japan remained unchanged during the month of July, largely missing market estimates for a rise. This trailed the sharp jump witnessed in the previous month, an indication of the inconsistent pattern of growth despite Prime Minister Shinzo Abe's efforts to revitalize the economy.

Japan’s industrial production remained flat m/m following a rise of 2.3 percent in June, data released by the Ministry of Economy, Trade and Industry showed Wednesday, compared with an increase of 0.8 percent expected by market participants.

Further, a ministry survey showed that the volatile performance is expected to continue with a rise of 4.1 percent in industrial production expected in August and a drop of 0.7 percent in September. However, compared to July 2015, industrial production declined 3.8 percent, official data showed.

Japan’s manufacturing sector has survived two major earthquakes at the start of this year, which forced shutdown of major industrial plants and factories throughout the affected areas. Sony, Honda and Toyota were just some of the companies to suspend production in April following the two powerful quakes in Kumamoto.

Moreover, a stronger yen has also pressured export industries and defied the Bank of Japan’s efforts to stimulate the economy. The yen has gained more than 15 percent against the US dollar this year. Meanwhile, investors are also eyeing a fresh round of stimulus by the BoJ next month. The central bank will deliver its verdict on Sep 21 after remaining lull during August.