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Japan manufacturing output edges up in May
Japan manufacturing output edges higher in May, as demand stabilizes following tax hike
Associated Press
2014-06-30 09:22 AM

TOKYO (AP) -- Japan's industrial output has recovered slightly in May from a decline following an April sales tax, stabilizing as factories produced more machinery, vehicles and electronic devices.

Factory output in the world's third-largest economy climbed 0.8 percent in May from a year earlier, and was up 0.5 percent from the month before, the economy ministry reported Monday. Output fell 2.8 percent in April.

Manufacturers having rising inventories and are forecasting a decline in output in June before a further recovery in July and beyond, the report said.

Assuming output falls as expected in June, Japan's manufacturing will likely fall 3.1 percent in the April-June quarter, Marcel Thieliant, an economist with Capita Economics, said in a commentary Monday.

"The rise in industrial production in May suggests that the sector is recovering from the weakness caused by the consumption tax hike," he said.

The increase in the sales tax to 8 percent from 5 percent is expected to cause a contraction in the economy in the April-June quarter, as demand has fallen off following a rush of purchasing to beat the tax hike earlier in the year.

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