MNI 5 THINGS: Japan Aug Output Rebounds But Q3 Seen Down

--Japan Aug Industrial Output +0.7% M/M; MNI Median +1.5%

--Japan METI Forecast Index: Sep Output +2.7% M/M, Oct +1.7%

--METI Repeats: Output Picking Up Moderately With Soft Spots

--METI: Sep Output Fcast Adjusted For Upward Bias +0.2%

     TOKYO (MNI) - Japan's industrial production rebounded modestly in August,

posting the first month-on-month rise, but higher output of passenger cars and

chip-making equipment was partly offset by a decline in output of electronic

parts and devices, amid concerns about the drag from the escalating U.S.-China

trade row, preliminary data released Friday by the Ministry of Economy, Trade

and Industry showed.

     The key points from the latest data:

     * Industrial production rose 0.7% on month in August, coming in weaker than

the MNI median economist forecast for +1.5% and following three months of drops

(-0.2% in July, -1.8% in June and -0.2% in May).

     * Factory operations appeared to have returned to normal after heavy rains

hit southwestern Japan in July, causing a parts supply shortage and a

distribution network breakdown and leading to a decline in transport equipment

and production machinery.

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

production would rise 2.7% on month in September (revised up from +0.5% forecast

last month) and gain a further 1.7% in October. Adjusting the upward bias in

output plans, METI forecast production would rise at a slower pace of 0.2% on

month in September.

     * If factory output rises 0.2% in September, as forecast, it would slump

1.0% on quarter in July-September, the first q/q drop in two quarters after

+1.3% in Q2 and -1.3% in Q1.

     * METI maintained its assessment after downgrading it for the first time in

six months last month, saying, "While production is picking up moderately, there

are signs of weakness in some areas."

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

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