Japan’s economy shows more signs of recovery following March earthquake
31 May 2011
Japan's economy showed additional signs of recovery following the deadly March earthquake and tsunami with industrial output last month increasing and manufacturers planning to hike production further in May and June, bringing it to near pre-March levels.
However, even as the upbeat mood raised prospects of a possible, ''V shaped'' recovery for the third largest economy in the world Moody's Investors Service
flagged its concerns over the weak policy response to the crisis.
The rating agency moved a step closer to downgrading the country's debt ratings, putting it on review for a possible downgrade which served to highlight its concerns over the policy response to "faltering economic growth prospects".
According to data today, output was up 1.0 per cent in April, short of economists' median 2.8 per cent forecast, but firms' plans for the following two months point to a smart recovery from a record 15.5 per cent slump in the following the 11 March disaster.
Manufacturers projected an 8.0 per cent increase in their May output and a similar 7.7 per cent increase in June, according to the Ministry of Economy, Trade and Industry data.
According to analysts, starting May, a V-shaped recovery may start and output may keep rising through July and August at a similar pace to that forecast for May and June.
