2. Japan Industrial Production Published by: Ministry of Economy, Trade and Industry (METI), Japan Frequency: Monthly Period Covered: Prior month Volatility: Low Market significance: Moderate Web site: http://www.meti.go.jp/english http://www.meti.go.jp/english

3. What is it? Japan Industrial Production Measures output changes for the industrial sector of the economy. Measures production, demand, and the equipment needed for production. Tool for forecasting future GDP and economic performance. Used by central banks to measure inflation.

4. Japan Industrial Production What is it in the report? 4 Index’s: Industrial Production: Value-added weight Production-value weight Producer’s Shipments: Reveals the state of transactions (factory shipments) at the level of the producer Producer’s Inventory of Finished Goods: Shows the state of product inventories remaining with the producer. Producer’s Inventory Ratio of Finished Goods: Provides direct view of supply & demand trends for products

5. Why is it important? U.S. possess the largest and most self-sufficient economy in the world, thus, impervious to the ups and downs of foreign economic cycles. Healthy domestic economic performance depends on how well other nations are doing. Ranked 5 th in the “Top Ten” Intl. Economic Indicators. Japan Industrial Production

6. Why is it important? (cont.) Explain changes in GDP. Highly sensitive to the business cycle and can often predict future changes in employment, earnings and personal income. Describes to what extent various industries participating in the pace of economics growth changes. Japan Industrial Production

7. Keys to Interpreting the Data Be aware that a preliminary report is published in the final week of the month following the month being covered. Notice that a revised report is released two to three weeks later. Indus. Prod. is expressed as percentage of real output (adjusted for inflation) relative to a base year. Pay attention to percent change of the level from month to month and how it compares with the percent trend of the economy at that time. Japan Industrial Production

8. Historical Data (Seasonally Adjusted) Japan Industrial Production Raw Data Obtained from METI Statistics

9. Recent Data Analysis I: Changes in Production  Production has decreased in March by 0.6% from the previous month.  Industries contributed to the decrease are:  General machinery  Electrical machinery  Fabricated metals Japan Industrial Production

10. Recent Data Analysis I: Changes in Production (cont.)  Commodities contributed to the decrease are:  Semiconductor products machinery  Cellular telephones  Reaction vessels Japan Industrial Production

11. Recent Data Analysis II: Production Forecast for Apr. & May  According to the Survey of Production Forecast in Manufacturing, production is expected to increase by1.5% in April and 1.4% in May.  Industries that will contribute to the increase in April are:  General machinery  Electrical machinery  Non-ferrous metals Japan Industrial Production

12. Recent Data Analysis II: Production Forecast for Apr. & May (cont.)  Industries that will contribute to the increase in May are:  Electronic parts and devices  Transport equipment  Information and communication electronics equipment Japan Industrial Production

13. Recent Data Analysis III: Changes in Shipments  Shipments in March decreased 1.5% from the previous month.  Industries contributed to the decrease are:  General machinery  Fabricated metals  Electrical machinery Japan Industrial Production

14. Recent Data Analysis IV: Changes in Inventory  Inventory in March decreased 0.5% from the previous month.  Industries contributed to the decrease are:  Transport equipment  Electrical machinery  Textiles  Inventory ratio increased 1.8% from previous month. Japan Industrial Production

15. Recap of the Data Analysis  Industrial production is on a moderately upward trend.  Production, shipments & inventory decreased.  Inventory ratio increased. Japan Industrial Production

16. Recap of the Data Analysis (cont.)  According to the Survey of Production Forecast in Manufacturing, production is expected to increase in April & May. Japan Industrial Production

17. Latest Release New Industrial Structure Report: 3 industrial groups Industries capable of surviving international competition such as the fuel cell industry and the digital consumer electronics industry Industries such as the health and welfare devices and services industry that meet market needs in keeping with social changes while at the same time creating jobs Industrial clusters for regional revitalization Japan Industrial Production

18. Latest Release (cont.) Industrial clusters for regional revitalization: Advanced high-tech industry Development of new businesses in the manufacturing industry Innovation in regional service industries High value-added food industry Japan Industrial Production

19. This concludes our presentation. Presentation completed by Amy Au & Eunice Au For Econ 435 Professor Castillo