Japan May Industrial Production Down 5.9% Month-on-Month... Largest Drop in 1 Year (Comprehensive)

Vehicle Production Plummets 19.4% Due to Semiconductor Supply Shortage

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Kim Suhwan] Japan's industrial production in May fell by 5.9% compared to the previous month. The sharp decline in automobile production within Japan is analyzed as the main cause.

On the 30th, Japan's Ministry of Economy, Trade and Industry announced that Japan's industrial production in May fell by 5.9% compared to the previous month. This figure is a larger drop than the market expectation of a 2.4% decline.

This is the largest drop in nearly a year since June of last year. The sharp decline in automobile and manufacturing machinery production within Japan was the main factor.

Specifically, automobile production fell by 19.4% due to the impact of the semiconductor supply shortage for vehicles.

However, in a survey conducted by the Ministry of Economy, Trade and Industry targeting manufacturers, the majority of respondents expected industrial production in June to expand by 9.1%.

The authorities also maintained their previous assessment that industrial production will turn to an upward trend.

Yastoshi Nishimura, Minister for Economic Revitalization, said that the economy is expected to recover to pre-COVID-19 levels by March next year.

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