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Japan’s industrial production slides on weak export orders from United States in microelectronics confirming slumping US industrial production
Alex Rana
Jun. 27, 2007
The industrial production in Japan fell while economists were expecting the same to rise. The root cause of the unexpected drop is primarily because of slumping orders in microelectronics from US .
The US economy is ready for a major slowdown. It can and will drag the rest of the world with it. Japanese industrial production reports manifest that effect.
The Yen reacted very interestingly. The varry trades are self reversing taking yen higher with it.
Japanese production fell a seasonally adjusted 0.4 percent from a month earlier, the Ministry of Economy, Trade and Industry said in Tokyo today. The economists were expecting a rise of 0.8 percent.
The decline may dissuade Bank of Japan Governor Toshihiko Fukui and his policy-making colleagues from raising interest rates in July. Fukui said this month that the bank needs more evidence of the economy's strength before it raises the key rate from 0.5 percent, the lowest among major economies. However, Japan is eager to put a stop in carry trade. That mans either Bank of Japan will buy Yen in open market or raise interest rate soon.
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