MNI 5 THINGS: Japan Apr Factory Output Rise Weak, Q2 Seen Up

--Japan Apr Industrial Output +0.3% M/M; MNI Median +1.3%

--Japan METI Forecast Index: May Output +0.3% M/M, June -0.8%

--Japan METI Keeps View: Factory Output Picking Up Moderately

--Japan METI: May Output Fcast Adjusted For Upward Bias -1.3%

     TOKYO (MNI) - Japan's industrial output posted the third straight monthly

rise in April, indicating the slump in the first quarter may be temporary, but

manufacturers are cautious about output in May and June amid high inventories,

preliminary industrial production released Thursday by the Ministry of Economy,

Trade and Industry showed.

     The key points from April industrial production data:

     * Industrial production rose 0.3% on month in April, coming in weaker than

the MNI median economist forecast of +1.3%. It marked the third straight

month-on-month rise but decelerating sharply from +1.4% in March and +2.0% in

February. Output plunged 4.5% in January.

     * The April increase was led by higher output of passenger cars, production

machines and fabricated metals. It was partly offset by lower output of

electronic parts and devices, air conditioners and cosmetics.

     * Based on its survey of manufacturers, METI projected that industrial

production would rise 0.3% on month in May (revised up from -1.6% forecast last

month) and fall 0.8% in June.

     * Adjusting the upward bias in output plans, METI forecast production would

fall 1.3% on month in May. Based on this assumption and June forecast, factory

output would rise 0.7% on quarter in April-June, the first rise in two quarters.

In January-March, output slumped 1.3% from October-December, when it rose 1.6%.

It was the first q/q drop in eight quarters.

     * METI maintained its assessment, saying industrial production is "picking

up moderately." Inventories fell 0.4% on month in April, the first drop in three

months, but METI noted their level was still high.

--MNI Tokyo Bureau; tel: +81 90-2175-0040; email: hiroshi.inoue@marketnews.com

--MNI Tokyo Bureau; tel: +81 90-4670-5309; email: max.sato@marketnews.com

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