China factory growth quickens, Japan’s tumbles

China’s factories grow at the quickest pace in months but Japan’s industrial output falls faster than at any time since the devastating earthquake of March 2011 as the fortunes of Asia’s two major economies diverge. As Ciara Lee reports, the prospect of Tokyo regaining traction for a stubborn economy still appears remote.

▲ Hide Transcript

View Transcript

They’re two major economies – but China and Japan’s fortunes are on different paths according to the latest data.
While Japan’s industrial output tumbled.
Chinese factories grew at their quickest pace in three months in June.
The official purchasing managers’ index expanded for an eleventh straight month, suggesting the economy is on an even keel – rather than slowing sharply.


“A lot of the worries you had a couple of years ago seem to have dropped off the radar really in terms of economic growth, in terms of consumer spending. And what looks to be relatively robust I think is not without its concerns. But the comments this week about China looking to eliminate some of the lower cost iron ore and steel production suggests they’re far more comfortable with the state of the economy as it currently is now versus what it was a couple of years ago.”
Growth in the services sector also accelerated – the latest official PMI reading, at 54.9 in June, its highest since March.
Insiders say China’s central bank will likely hold off on further monetary policy tightening in coming months, with a deleveraging drive a potential threat to growth.
In Japan, industrial output fell by a larger-than-expected 3.3 percent in May.
The makers of cars and construction machinery cut output because of high inventories.
Household spending also fell, leaving the Bank of Japan’s 2 percent inflation target seemingly out of reach.


“Japanese consumers are struggling with a slight uptick in unemployment as well as slightly higher inflation. That is really putting a sort of dampeners on consumer demand…

Read the full article from the Source…

Leave a Reply

Your email address will not be published. Required fields are marked *