TOKYO, Sept 30, (AFP): Japan’s industrial output rose less than expected and household spending plunged in August, data showed on Friday, amid concerns slowing demand could hamper the nation’s fragile post-quake recovery.
Worries for the health of the world’s third-largest economy have increased as exporters face a soaring yen that eats into repatriated profits and as demand softens both at home and abroad amid fears of a global recession.
Such factors are seen as undermining Japan’s recovery from the March 11 disasters that left 20,000 dead or missing and triggered meltdowns at the Fukushima Daiichi nuclear plant 220 kilometres (138 miles) northeast of Tokyo.
Finance Minister Jun Azumi said Friday that Japan will secure an additional 15 trillion yen ($195.79 billion) in funds it can use to intervene in currency markets as it looks to reinforce its ability to tame the currency.

Jun Azumi added that the finance ministry will require currency traders to report daily their trading positions for another three months beyond the end of September in a bid to deter speculative moves.
Japan’s factory production rose by 0.8 percent in August on-month, the fifth straight monthly gain since plunging in the wake of the tsunami that crippled component supply chains and led to the shutdown of factories.
But the data missed expectations of a 1.5 percent gain.
Meanwhile consumer spending, accounting for just under two-thirds of the economy, continued to slide. Friday’s data showed household spending fell 4.1 percent in August on-year, missing forecasts of a 2.9 percent fall.

“We cannot be optimistic about the outlook,” said Yoshiki Shinke, chief economist at Dai-Ichi Life Research Institute. “Japanese firms are cautious amid uncertainties overseas and a stronger yen.”
The Ministry of Economy, Trade and Industry said that production “has almost recovered from the Great East Japan Earthquake” but warned that “it would be necessary to keep watch on future developments.”
Producers polled by the government expected output to fall 2.5 percent in September before rebounding 3.8 percent in October, amid concerns over the eurozone debt crisis and a US slowdown.
Output tumbled by a record 15.5 percent in March following the earthquake, while household spending fell 8.5 percent, helping push Japan into recession.
In August, workers’ households spending on automobiles dropped by almost two-thirds and appliance purchases dropped 40 percent, partly due to the lower TV sales that had surged ahead of the end of analogue broadcasts in Japan in late July.
Data on Thursday showed Japan’s retail sales fell for the first time in three months during August, partly due to the effect from lower TV sales.
Meanwhile base salaries declined by an average 1.7 percent.
“Sales of digital TVs fell back after getting support from the transition to digital terrestrial transmission in July,” said Shinke. “Employment and wages are not expected to grow so consumer spending is highly likely to slow down as such temporary factors disappear.”
Analysts say the latest data illustrate the fragile state of Japan’s economy and will spur opposition to the government’s plan to raise taxes to help fund reconstruction from the March 11 disasters, amid fears it could hit growth.
Separate government data on Friday showed Japan’s core consumer prices rose 0.2 percent in August from a year earlier, beating market expectations of a 0.1 percent increase.

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TOKYO: Japan’s Finance Minister said Friday that Japan will secure an additional 15 trillion yen in funds it can use to intervene in currency markets, warning it will act against speculative moves on the yen.
Jun Azumi added that the finance ministry will require currency traders to report daily their trading positions for another three months beyond the end of September in a bid to deter speculative moves.
Japan will boost the size of its intervention funds by 15 trillion yen ($195.79 billion) to “flexibly” respond to the yen’s upward trend, Azumi said.
Azumi said the government will make necessary arrangement to raise intervention funds under the planned third extra budget for fiscal 2011.
The move would lift the accumulated total amount the government is allowed to borrow from the market to finance intervention to 165 trillion yen.

This means it would be able to raise an additional 46 trillion yen in the future if necessary because it has already used up 119 trillion of the total.
In August, the ministry and the Bank of Japan intervened in the market, selling 4.51 trillion yen for dollars in a bid to weaken the Japanese unit.
But the move, as with previous interventions in September 2010 and in March with the support of the Group of Seven nations, failed to deter the yen’s rise to a postwar high of 75.95 against the US dollar and a ten-year high versus the euro.
The strength of the unit has raised fears of a “hollowing out” of Japanese industry as manufacturers, seeing repatriated profits eroded, shift more production overseas in search of cheaper labour costs.
But the yen’s strength also makes foreign purchases more attractive for companies wishing to expand overseas.
The safe-haven unit has surged as investors move into the currency to escape global market turmoil due to eurozone debt worries and a slowdown in the US economy.