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REPEAT: MNI 5 THINGS: Japan June Factory Output Down, Q3 Flat

Repeats Story Initially Transmitted at 05:34 GMT Jul 31/01:34 EST Jul 31
--Japan June Industrial Output -2.1% M/M; MNI Median -0.4% 
--Japan METI Forecast Index: July Output +2.7% M/M, Aug +3.8% 
--METI: July Output Fcast Adjusted For Upward Bias +0.2% M/M 
--Japan Q2 Factory Output +1.2% Q/Q After -1.3% Q1 
--METI Keeps View: Factory Output Picking Up Moderately
     TOKYO (MNI) - Japan's industrial output posted the second straight
month-on-month drop in June, but production rebounded in April-June, indicating
the economy was back on a modest growth track after a temporary slump in Q1,
preliminary data released Tuesday by the Ministry of Economy, Trade and Industry
showed.
     The key points from the latest data:
     * Industrial production fell 2.1% on month in June, coming in weaker than
the MNI median economist forecast for -0.4%. It marked the second straight drop
after -0.2% in May. In April-June, output rose 1.2% from January-March, when it
fell 1.3%.
     * The June decrease was led by lower output of chip-making equipment due to
delayed delivery schedules, seasonal chemical products and fabricated metals.
Electronic parts and devices, key export items, saw their output up, but
production of passenger cars was much smaller than expected, leading to the
overall drop in industrial production.
     * Based on its survey of manufacturers, METI projected that industrial
production would rise 2.7% on month in July (revised up from +0.8% forecast last
month) and gain a further 3.8% in August.
     * Adjusting the upward bias in output plans, METI forecast production would
rise just 0.2% on month in July. Based on this assumption and if September
output were flat, production would fall 0.1% on quarter in July-September, the
first drop in two quarters.
     * METI maintained its assessment, saying industrial production is "picking
up moderately."
--MNI Tokyo Bureau; tel: +81 90-4670-5309; email: max.sato@marketnews.com

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