MNI BRIEF: Japan June Factory Output Drops On Weaker Autos

Japan's industrial output fell 3.6% m/m in June for the first drop in two months following May's 3.6% gain due to weaker production of motor vehicles and machinery, data released by the Ministry of Economy, Trade and Industry showed on Wednesday.

Production of motor vehicles fell 8.9% m/m in June for the first drop in two months following May's 18.1% growth.

Bank of Japan officials expected industrial production to rise due to a recovery of automobile manufacturing.

Based on its survey of manufacturers, METI projected industrial production would rise 6.5% m/m in July (revised up from +3.6% forecast last month) before rising 0.7% in August.

Adjusting the upward bias in output plans, METI forecast production would increase 4.0% m/m in July.

Based on this assumption, and if September output were flat, production would rise 3.1% q/q in July-September, the second straight quarterly rise following +2.9% in Q2.

The METI left its assessment from the previous month, saying that industrial production is weakening while it is marking time.