Japan Factory Output Logs Sharpest Drop Since Tsunami Disaster

Japan Factory Output Logs Sharpest Drop Since Tsunami Disaster

TOKYO -- Hit largely by drops in cars and industrial machines, Japan's factory production in June logged its sharpest fall since the 2011 earthquake-tsunami disaster. Production fell 3.3% month-on-month after a 0.7% rise in May, the trade and industry ministry said.

It is the worst drop since March 2011, when production dived 16.5% with supply chains disrupted by the natural and nuclear disaster.

The June reading was also much worse than the market's median forecast of a 1.2% drop.

Companies had stepped up production ahead of an April 1 sales tax rise -- Japan's first in 17 years -- as shoppers made a last-minute dash to buy staples and big-ticket items such as cars and refrigerators.

In the latest report, the ministry said a survey of manufacturing sectors shows they expect to increase production by 2.5% month-on-month in July, and another 1.1% in August.

Copyright Agence France-Presse, 2014

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