Japan's Industrial Output Fell in July on Earthquake

Japan's industrial production fell in July after an earthquake disrupted output at automakers Toyota Motor Corp. and Honda Motor Co.
Production fell a seasonally adjusted 0.4 percent from June, the Ministry of Economy, Trade and Industry said in a report in Tokyo today. The median estimate of 44 economists surveyed by Bloomberg News was for a 0.3 percent decline.
Riken Corp., Japan's largest maker of piston rings, shut factories for a week following the July 16 quake, cutting off supplies for automakers and forcing them to temporarily close plants. Bank of Japan board member Atsushi Mizuno said yesterday the fallout from the U.S. subprime-mortgage crisis probably won't have a serious impact on global economic growth."Production will probably rebound this month after the quake but we could see it start to slow,'' Seiji Adachi, a senior economist at Deutsche Securities Inc. in Tokyo, said before the report was released."If U.S. demand slows it's going to be tough for exporters, making it hard for the BOJ to raise rates.''Output would have risen had automakers not dragged the number down 1.2 percentage points, the Trade Ministry said. The yen traded at 115.88 per dollar at 9:40 a.m. in Tokyo from 115.97 before the report was published.

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