Japan's factory output likely to fall for second consecutive month in May

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Japan's factory output likely to fall for second consecutive month in May

A worker cycles near a factory in the Keihin Industrial Zone in Kawasaki, Japan

TOKYO Reuters poll shows that Japan's factory output probably fell for a second consecutive month in May due to supply chain disruptions caused by strict COVID 19 lockdowns in China.

In the month, Japanese industrial production was likely to be 0.3% lower than in April, according to the median estimate of 18 economists in the poll.

It was the first fall in three months after a 1.3% slip in April.

Sumpei Fujita, economist at Mitsubishi UFJ Research and Consulting said bottlenecks from the semiconductor crunch and components shortage are likely to keep Japan's production weak, according to Shumpei Fujita, economist at Mitsubishi UFJ Research and Consulting.

Some analysts believe that there will be a slight increase in May factory output due to the robust manufacturing of electronic parts and production machinery.

Takeshi Minami, chief economist at the Norinchukin Research Institute, said that Japan's production outlook is less optimistic, with greater concerns now about such things as unexpectedly prolonged disruption to supply and rising raw material prices.

The May retail sales were forecast to have been up 3.3% on a year ago, posting the third month of annual growth.

In June, Tokyo's core consumer price index - which is a leading indicator of Japanese price trends - was likely to be 2.1% higher than a year earlier, accelerating from a 1.9% annual rise seen in May.

Japan's unemployment rate was flat at 2.5%, and the ratio of jobs to applicants was expected to tick up to 1.24 in May.