TOKYO, July 27 - Japan's industrial output is expected to have fallen in June for a fourth straight month, hurt by declining exports, especially to the United States, a poll showed on Friday. A survey of 16 economists produced a median forecast of a 0.2 percent drop in output from the previous month. Forecasts ranged from a 0.2 percent gain to a 1.0 percent fall, with only three economists predicting a month-on-month increase. The average forecast was for a 0.3 percent fall.
The industrial production data will be released at 8:50 a.m. on Monday (2350 GMT Sunday) by the Ministry of Economy, Trade and Industry. "The exports are very weak and their impact on industrial output is substantial," said Yoshito Sakakibara, a senior economist at Merrill Lynch. Output would remain stagnant and then hit bottom in the October-December period, he said. Industrial production and exports, driving forces of Japan's tentative recovery last year, have fallen in recent months, painting a grim picture of the world's number two economy.
Industrial output fell 1.2 percent in May from a year earlier, marking a third straight month of decline. "Production will further slow from companies' original plans around January," an economist at Goldman Sachs saidм Economists said the key to recovery was how soon exports to the United States, Japan's biggest trading partner, start rising. Exports have decelerated in recent months, mainly because of the U.S. economic slowdown, making companies yet more chary about boosting production.
Some economists said painful but vital structural reforms championed by Prime Minister Junichiro Koizumi could put further downward pressure on the faltering economy. The pain, coupled with weak domestic economic conditions, means the outlook for Japan's industrial output largely depends on prospects for the U.S. economic recovery, they said. Economists said output would start picking up from around the end of this year to the first quarter of 2002.