· Japan's February industrial production was revised up sharply using a new data formula. Production is now in line with Japan’s strong exports, solving one of the puzzles about the economy for the Bank of Japan.  Industrial production rose 1.6% in February from January, revised up significantly in a turnaround from the initial estimate of a 1.2% fall that was reported last month. The revision was due mainly to a change in data calculation methods rather than to revised data themselves. From a year earlier, February production rose 5.1% after gaining 2.2% in January. Still, for manufacturing sequential growth rates do not paint a clear picture. The revision has elevated the three-month growth rates to strong levels. But, even with the new readings, over six months there is a lull in growth compared to the 12-month pace. This finding is across the board in manufacturing; utilities output has a stronger more consistent trend.  It is thus too soon to say that the revival discovered though data revision is what it seems. Several more months of data should help to clarify the nature of the trend.

Japan Industrial Production Trends

m/m %

Saar %

Yr/Yr

seasonally adjusted

Feb-08

Jan-08

Dec-07

3-mo

6-mo

12-mo

Yr-Ago

Mining & Manufacturing

1.6%

-0.5%

0.6%

6.8%

0.9%

4.0%

4.0%

Total Industry

2.0%

-0.5%

0.5%

8.4%

1.6%

4.4%

3.9%

Manufacturing

1.6%

-0.6%

0.7%

6.8%

0.9%

4.0%

4.0%

Textiles

-0.2%

-2.3%

1.6%

-4.0%

-6.3%

-6.0%

-3.6%

Transport Eqpt

1.3%

1.8%

1.3%

18.9%

5.4%

11.4%

6.7%

Product Group

Consumer Goods

2.7%

0.2%

0.9%

16.4%

1.8%

6.9%

3.2%

Intermediate Goods

1.0%

-1.9%

1.1%

0.7%

2.0%

4.0%

4.6%

Investment Goods

1.1%

0.5%

0.0%

6.4%

-2.6%

-0.5%

4.6%

Mining

2.3%

-6.7%

-1.6%

-22.0%

-5.7%

-4.5%

4.8%

Electricity & Gas

9.7%

0.1%

-1.2%

38.7%

17.4%

17.5%

-1.4%