Log in
Forgot password ?
Become a member for free
Sign up
Sign up
New member
Sign up for FREE
New customer
Discover our services
Dynamic quotes 

MarketScreener Homepage  >  News  >  Economy & Forex  >  All News

News : Economy & Forex
Latest NewsCompaniesMarketsEconomy & ForexCommoditiesInterest RatesBusiness LeadersFinance Pro.CalendarSectors 
All NewsEconomyCurrencies / ForexCryptocurrenciesEconomic EventsPress releases

Japan factory output slumps as economy sinks deeper in recession

share with twitter share with LinkedIn share with facebook
06/30/2020 | 12:56am EDT
FILE PHOTO: Smoke rises from a factory during sunset at Keihin industrial zone in Kawasaki

By Tetsushi Kajimoto and Daniel Leussink

Japan's industrial output fell for a fourth straight month in May to the lowest level since the global financial crisis and the jobless rate hit a three-year high, underscoring the broad economic pain caused by the coronavirus.

The world's third-largest economy is bracing for its worst postwar recession, hurt by coronavirus lockdown measures at home and overseas that have upended supply chains, kept businesses shut and depressed consumer spending.

Ministry of Economy, Trade and Industry (METI) data out on Tuesday showed that factory output fell 8.4% month-on-month in May to 79.1, a level not seen since March 2009 when the financial crisis sapped global demand.

"The economy likely suffered a big contraction in April-June due to weak domestic and external demand," said Taro Saito, executive research fellow at NLI Research Institute.

"Domestic demand may look up from June, but exports will remain very weak, putting a drag on overall economic recovery," he said, adding that the worsening of the economy would flow on to the labour market.

The deterioration in economic conditions has triggered an increase in the jobless rate and a fall in the number of available jobs, while stoking fears of bankruptcies.

The seasonally adjusted jobless rate rose to 2.9% in May from 2.6% in April, separate government data showed, the highest rate since May 2017.

While the jobless rate remained below 3%, less than in many advanced countries, economists say the actual figure is higher, given the rise in furloughed staff and the impact of discouraged workers who have stopped seeking jobs.

The coronavirus fallout has pushed 290 firms into bankruptcy since the end of February, with many service-sector firms like restaurants, hotels and inns and apparel suffering the most, data from private credit research firm Teikoku Databank showed.


The decline in factory output followed a 9.8% drop in the prior month, and was much bigger than the median market forecast of a 5.6% drop in a Reuters poll of economists, the data showed.

On a positive note, manufacturers surveyed by METI expect output to rise 5.7% in June and 9.2% in July.

The government, however, left its assessment of industrial production unchanged, saying it was "lowering sharply", the bleakest official view since late 2008.

Output of cars, production machinery, steel and other broad industries were hit hard by slumping demand at home and abroad due to the pandemic. All industries surveyed posted a fall in output.

Global production at Japan's major automakers, including Toyota Motor Corp and Nissan Motor Co, slumped 62% in May from a year ago, following a 55% fall in April, as car demand plunged globally amid lockdowns to stop the virus from spreading.

Japan's economy shrank an annualised 2.2% in January-March, slipping into recession for the first time in 4-1/2 years, and analysts expect the health crisis to have driven a deeper slump in the current quarter.

The number of employees fell in May by 730,000 workers compared to a year earlier, posting the biggest annual decline since November 2009, a government official said.

The number of furloughed workers stood at 4.23 million, the second highest on record after hitting an all-time high of 5.97 million in April.

The jobs-to-applicants ratio fell to 1.20 in May from 1.32 in April, falling at its fastest pace since 1974 to mark the lowest reading since July 2015, labour ministry data showed. It means six jobs were available per five job-seekers.

(Reporting by Tetsushi Kajimoto; Editing by Shri Navaratnam and Richard Pullin)

Stocks mentioned in the article
ChangeLast1st jan.
NISSAN MOTOR CO., LTD. -1.91% 391.2 End-of-day quote.-38.50%
TOYOTA INDUSTRIES CORPORATION -2.44% 5600 End-of-day quote.-11.53%
TOYOTA MOTOR CORPORATION -0.62% 6728 End-of-day quote.-12.78%
share with twitter share with LinkedIn share with facebook
Latest news "Economy & Forex"
07:05aVenturist, Inc. Announces That Its New Virtual Strategy Academy and Virtual Strategy Development Programs Are Ready To Go!
07:01aOil steady as coronavirus fears offset gasoline recovery signs
07:00aDon Baham accepted into invitation-only Forbes Technology Council
06:55aDollar gives ground to higher-risk currencies as Chinese shares soar
06:54aUK set to borrow £350 billion and more is likely, IFS says
06:48aPALESTINE MONETARY AUTHORITY : The PMA Business Cycle Index (PMABCI) – June 2020
06:43aFrance backs Spanish candidate to lead Eurogroup of finance ministers
06:38aUzbekistan resumes WTO membership negotiations
06:38aL'Ouzbékistan reprend les négociations en vue de son accession à l'OMC
06:38aUzbekistán reanuda sus negociaciones de adhesión a la OMC
Latest news "Economy & Forex"