According to official data, Japan’s output fell 0.6% in July against the previous month when it increased 1.1%. Compared to July last year, the output grew 0.2%.
The experts anticipated increase both month on month and year on year, by 0.1% and 0.8% respectively.
Softer growth in China, the Japan’s major trading partner, is considered to be the reason for Japan’s economic slowdown in the second quarter 2015. The PRC’s downturn had a negative impact on Japan’s export volume.
For the third time since the beginning of 2015, key inflation gauge calculated by the Bank of Japan dropped to zero as the consumer spending in July reduced.
“Production is sluggish because private consumption and exports remain weak. Concern about China and emerging economies is posing a risk to output, ¬¬” said Toru Suehiro, an economist at Mizuho Securities Co.
Warehouse inventories of the Chinese companies dropped by 0.8% in July against the previous month. Such a decrease is seen for the first time since May. Transport equipment production fell 5.9% compared with the decline of 5.3% in June.
According to the Trade Ministry of Japan, manufacturing companies are planning to boost production by 2.8% in August; however, they expect a decrease of 1.7% the next month.
