Japan Factory Output Rose in February, Evidence of Resilience Before Quake
Japan’s industrial production unexpectedly rose in February, another sign that the economy was recovering before the nation’s strongest earthquake this month shut factories and caused power shortages.
Factory output climbed 0.4 percent from January, the fourth consecutive gain, the Trade Ministry said in Tokyo today. The median estimate of 24 economists surveyed by Bloomberg News was for a 0.1 percent drop.
The Nikkei 225 (NKY) Stock Average has fallen about 9 percent since the March 11 disaster because of the government’s failure to end radiation leaks at a nuclear plant and concern the nation will sink back into a recession. The unemployment rate fell by the most in a year in February and the Bank of Japan’s Tankan survey this week may show companies were optimistic about the economy before the temblor killed more than 11,000 people.
“Until February we saw output was rebounding and the economy was on a path to recovery buoyed by exports,” said Hiroshi Shiraishi, an economist at BNP Paribas SA in Tokyo. “But the disaster changed everything and the economy is faced with huge supply constraints now.”
Japanese stocks rose 0.4 percent to 9498.62 at 9:58 a.m. in Tokyo on speculation global growth will boost earnings. The yen traded at 82.47 against the dollar and has weakened more than 5 percent since surging to a postwar high earlier this month.
Goldman Sachs Group Inc. said this week that Japan’s gross domestic product will shrink next quarter and lowered its growth forecast for the year starting April 1 to 0.7 percent from 1.3 percent.
The central bank’s quarterly Tankan survey of business confidence will probably show on April 1 sentiment among large manufacturers was at 5 points in March, unchanged from December, according to the median forecast of 19 economists surveyed by Bloomberg News. A positive reading means optimists outnumber pessimists.
The unemployment rate unexpectedly fell to 4.6 percent from January’s 4.9 percent, the statistics bureau said yesterday. The number of available jobs rose to the highest level in two years, and retail sales increased last month.
Manufacturers said they plan to increase output 1.4 percent in March and cut production 1.3 percent in April, a government survey included in today’s output report showed. The forecasts were compiled before the earthquake.
“It’s apparent that the level of production has declined sharply since the earthquake as the disaster has caused power shortages and disruptions to the supply chain,” Yoshimasa Maruyama, a senior economist at Itochu Corp. in Tokyo, said before the report. “There’s high chance that Japan’s economy will fall into a recession.”
The government last week estimated that damage from the disaster, which left more than 27,000 people dead or missing, at as high as 25 trillion yen ($306 billion).
The magnitude-9.0 earthquake and an ensuing tsunami crippled Tokyo Electric Power Co.’s Fukushima Dai-Ichi atomic plant, triggering the world’s worst nuclear crisis since Chernobyl in 1986. That limited the supply of electricity to the country’s most industrialized area, as the utility company began rolling blackouts in Tokyo and surrounding areas.
Companies are still struggling to bring factories back online. Toyota Motor Corp. said it has lost output of 140,000 vehicles, and Honda Motor Co. has seen a production loss of 46,600 cars and trucks and 5,000 motorcycles.
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