Japan’s industrial production rose less than expected in May, missing analysts’ estimates as the US tariffs hit the nation’s exports.Factory output increased 0.5% from the previous month, the Industry Ministry reported Monday. Economists had expected a 3.5% gain. Output fell 1.8% from a year earlier, missing expectations of a 1.6% rise.
Manufacturers anticipate monthly production will gain 0.3% in June and decline 0.7% in July, according to the release.
Production machinery led the gain in output on a month-on-month basis. Transportation vehicles, excluding cars, were the biggest drag, falling 16.3%, with production of aeroplane parts declining.Inorganic and organic chemical products also weighed on overall production. Output for steel and non-ferrous metals rose 1.9% before President Donald Trump doubled the duty on steel and aluminium to 50% in early June.
Manufacturers anticipate monthly production will gain 0.3% in June and decline 0.7% in July, according to the release.
Production machinery led the gain in output on a month-on-month basis. Transportation vehicles, excluding cars, were the biggest drag, falling 16.3%, with production of aeroplane parts declining.Inorganic and organic chemical products also weighed on overall production. Output for steel and non-ferrous metals rose 1.9% before President Donald Trump doubled the duty on steel and aluminium to 50% in early June.
Trump’s tariff campaign continues to disrupt global commerce, with abrupt policy changes making it difficult for companies to plan and execute production.
It remains unclear if the baseline duty on Japanese exports to the US will return to 24% from 10% in early July. More than two months into negotiations, Japan has yet to reach a trade agreement with the US as Tokyo targets a complete package that covers sectoral tariffs, including its all-important auto industry.
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