MNI POLICY: BOJ Sees Japan Q4 Industrial Output May Rebound

     TOKYO (MNI) - Bank of Japan (BOJ) officials think the country's industrial

production will rebound in the fourth quarter after natural disasters weakened

third-quarter performance.

     Production in September fell 1.1% from August, according to preliminary

data released today by the Ministry of Economy, Trade and Industry (METI). That

is worse than a reduction of 0.3% projected by the median of a forecast by

economists surveyed by MNI.

     Output for Q3 fell 1.6% from Q2, after a gain of 1.3% in Q2 from Q1, METI'S

data show. 

     In a statement, the METI maintained its outlook from last month, saying

that "while production is picking up moderately, there are signs of weaknesses

in some areas."

     Meanwhile, the BOJ board may consider slightly weakening its assessment

that industrial production is "on an uptrend" following the weak data.

     Adjusting the upward bias in output plans, the METI forecast production may

rise at a slower pace of 0.9% on month in October. 

     If factory output rises 0.9% monthly in October, drops 0.8% in November and

remains unchanged in December, the Q4 figure will fall 0.3% following -1.6% in

Q3.

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

--MNI Beijing Bureau; +86 10 8532 5998; email: william.bi@mni-news.com

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