Japan industrial output, core CPI fall in August

TOKYO (AP) ? Japan's industrial production slid further in August, dropping 1.3 percent from the previous month as auto and electronics output fell due to slumping global demand.

Data released Friday also showed core consumer prices, excluding food, continued to fall last month in another sign the world's third-biggest economy remains in the doldrums.

The weaker industrial output is the fourth straight month of decline and reinforces expectations that Japan's growth will shrink in the quarter that ends in September. It follows a 1.2 percent decrease in July.

Other economic data released Friday showed that the unemployment rate improved slightly, to 4.2 percent, while core consumer prices, minus fresh foods, fell 0.3 percent. That reflects persistent deflation, which also drags on economic growth.

Weak global and domestic demand is weighing on manufacturers, particularly electronics makers, who are facing intense competition from South Korean, Taiwanese and other Asian manufacturers. The strong yen, which erodes overseas earnings and makes Japanese-made products relatively more expensive, is also eating into profits.

Japan's industrial production fell 4.3 percent from a year earlier, as factories reduced output of electronics and components, communications equipment, chemicals and large passenger cars, the Ministry of Economy, Trade and Industry said.

Output is expected to fall further, by 2.9 percent, in September and to remain flat in October. Recent anti-Japanese turmoil in China, related to a territorial dispute, has forced factories to close and is hitting sales of Japanese brand vehicles, further darkening the outlook for manufacturing.

An overall slowdown in China's economic growth has also hit demand for construction materials, iron and steel and other industrial inputs.

Associated Press

Source: http://hosted2.ap.org/APDEFAULT/f70471f764144b2fab526d39972d37b3/Article_2012-09-27-Japan-Economy/id-52992b8f34f7424395068d9a7c90f43a

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