MNI 5 THINGS: Japan Mar Factory Output Up, Q1 Down; Q2 Seen Up

     TOKYO (MNI) - The key points from preliminary March industrial production

released on Friday by the Ministry of Economy, Trade and Industry (METI).

     * The index of industrial production rose 1.2% on month in March to a

seasonally adjusted 103.9 (100 in the 2010 base year), coming in stronger than

the MNI median economist forecast for +0.5%, but the rebound in March and

February (+2.0% m/m) was not strong enough to lift the first quarter output

after the 4.5% drop in January.

     * The second straight month-on-month rise was led by higher output of

electronic parts and devices, chemicals and transport equipment. However,

shipments fell 0.2% on month for the first drop in two months on declines in

vehicles, fuels and consumer electronics.

     * In the January-March quarter, factory output slumped 1.4% from

October-December 2017, when it rose 1.6%. It was the first quarter-on-quarter

drop in eight quarters.

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

production would rise 3.1% on month in April (revised down from +4.0% forecast

last month) and fall 1.6% in May.

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

rise at a slower pace of 1.4% on month in April. Based on this assumption and if

output is flat in June, industrial production would rise 1.9% on quarter in

April-June, the first rise in two quarters.

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

up moderately." But it also pointed out that shipments were down in March and

inventories entered a buildup phase. The ministry downgraded its view in

February, when it released weak January data.

--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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