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Repeats Story Initially Transmitted at 00:47 GMT Aug 31/20:47 EST Aug 30
--Japan July Industrial Output -0.8% M/M; MNI Median -0.4% 
--Japan METI Forecast Index: Aug Output +6.0% M/M, Sep -3.1% 
--METI: Adjusting For Upward Bias, Aug Output Seen +1.4%, Sep Flat
--Japan July-Sep Industrial Output Seen Up for 6th Straight Quarter
--Japan METI Maintains View: Output Shows Signs of Pickup
     TOKYO (MNI) - Japan's preliminary industrial production from the Ministry
of Economy, Trade and Industry released Thursday.
     * Industrial production posted the first month-on-month drop in two months
in July, falling a seasonally adjusted 0.8% in what the government called a
"relatively small reaction" to the strong 2.2% rise in June. The July result was
weaker than the MNI median forecast for -0.4% but production's recovery trend
remains intact amid a gradual pickup in both external and domestic demand.
     * The government maintained its assessment that factory output "shows signs
of a pickup," noting it rose 4.7% on year, the ninth straight year-on-year
increase, and the level of the Index of Industrial Production stood at 101.5 in
July, above the 101.0 average in the first six months of the year.
     * The decrease in July output was led by lower production of chip-making
machinery, turbines, electric machinery, chemicals and mini vehicles.
     * METI forecast for factory output based on its survey: +6.0% on month in
August (revised up from +3.6% projected last month); -3.1% in September. Based
on this projection, production in the July-September quarter is estimated to
rise 2.4% on quarter, which would be the sixth straight quarterly increase after
+2.1% in April-June.
     * Adjusting the upward bias in output plans, the METI projected production
would rise only 1.4% on month in August. On this assumption, the level of
production in September is likely to be flat or slightly lower than in August,
the METI said.
     * Shipments fell 0.7% on month in July, the first drop in two months after
+2.5% in June, while rising 4.1% on year, the ninth straight y/y increase.
     * Inventories fell 1.2% on month in July, for the second consecutive
month-on-month drawdown after -2.0% in June, and declined 2.4% on year for the
14th straight year-on-year fall after -2.9% in June. The buildup of industrial
inventories peaked in May and the level of inventories has fallen close to that
seen at the start of the year.
     * Shipments of capital goods excluding transport equipment - a key
indicator of the business investment component of GDP data - fell 4.4% on month
in July, the second consecutive drop after -0.9% in June, showing a slow start
to the July-September quarter.
--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
--MNI BEIJING Bureau; +1 202-371-2121; email: john.carter@mni-news.com

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