Japan's factory production fell in April for a second month as the U.S. slowdown spread, signaling the nation's export-led expansion may have peaked.
Output declined 0.3 percent from March, when it slid 3.4 percent, the biggest drop in five years, the Trade Ministry said today in Tokyo. The median estimate of 35 economists surveyed by Bloomberg News was for a 0.5 percent drop.
Today's report is more evidence that the world's second- largest economy is slowing after exports and consumer spending drove annualized growth of 3.3 percent last quarter. Central bank Governor Masaaki Shirakawa said this week that the U.S. slump, coupled with record oil and commodity prices, has made the outlook extremely uncertain.
"It looks like exports and manufacturing activity peaked out last quarter,'' Seiji Shiraishi, chief economist at HSBC Securities in Tokyo, said before the report. Slumps in output have coincided with each of Japan's three recessions since 1991.
Exports are showing signs of slowing. Overseas shipments in the first four months of 2008 rose at less than half the pace of the same period a year ago.
Crude oil exceeded $135 a barrel for the first time last week. Toyota Motor Corp., Japan's biggest company, says the higher prices of energy and raw materials, along with the yen's 6 percent rise against the dollar this year, will cause profit to fall for the first time in seven years.
Toyota isn't alone in facing a profit squeeze. Japanese companies' pretax earnings will fall 5 percent in the year ending March 2009, the first decline since 2001, according to a report last week by Shinko Research Institute.
That may mean smaller summer bonuses for Japanese workers and less spending by companies on new plant and equipment.
The higher cost of commodities isn't all bad news for Japan's exporters. It's increasing the wealth of resource-rich countries such as Russia, spurring demand for Japanese products in those markets. Demand from emerging economies has so far made up for a slump in shipments to the U.S., Japan's largest market.
Output declined 0.3 percent from March, when it slid 3.4 percent, the biggest drop in five years, the Trade Ministry said today in Tokyo. The median estimate of 35 economists surveyed by Bloomberg News was for a 0.5 percent drop.
Today's report is more evidence that the world's second- largest economy is slowing after exports and consumer spending drove annualized growth of 3.3 percent last quarter. Central bank Governor Masaaki Shirakawa said this week that the U.S. slump, coupled with record oil and commodity prices, has made the outlook extremely uncertain.
"It looks like exports and manufacturing activity peaked out last quarter,'' Seiji Shiraishi, chief economist at HSBC Securities in Tokyo, said before the report. Slumps in output have coincided with each of Japan's three recessions since 1991.
Exports are showing signs of slowing. Overseas shipments in the first four months of 2008 rose at less than half the pace of the same period a year ago.
Crude oil exceeded $135 a barrel for the first time last week. Toyota Motor Corp., Japan's biggest company, says the higher prices of energy and raw materials, along with the yen's 6 percent rise against the dollar this year, will cause profit to fall for the first time in seven years.
Toyota isn't alone in facing a profit squeeze. Japanese companies' pretax earnings will fall 5 percent in the year ending March 2009, the first decline since 2001, according to a report last week by Shinko Research Institute.
That may mean smaller summer bonuses for Japanese workers and less spending by companies on new plant and equipment.
The higher cost of commodities isn't all bad news for Japan's exporters. It's increasing the wealth of resource-rich countries such as Russia, spurring demand for Japanese products in those markets. Demand from emerging economies has so far made up for a slump in shipments to the U.S., Japan's largest market.
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