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[sludgehound]

Japan Output Rebounds in Sign Manufacturers Enduring Tax Rise

Compare above Bberg headline to CNBC one (way I saw it stressing "below expectations):
Japan industrial output rises 0.5% in May, below expectations
Video & short piece at CNBC. http://www.cnbc.com/id/101798473
----------------------------------------- Bberg below.
By Keiko Ujikane Jun 29, 2014 7:59 PM ET

Japan’s production rebounded in May, indicating that manufacturers are riding out a sales-tax increase as Prime Minister Shinzo Abe seeks to steer the economy through its aftermath

Industrial output rose 0.5 percent after dropping 2.8 percent in April, the trade ministry said today. The median forecast of 28 economists surveyed by Bloomberg News was for a 0.9 percent increase. The government projects production will decrease 0.7 percent in June and increase 1.5 percent in July.

With the economy forecast to contract this quarter, the focus is on whether growth will be strong enough over the next three months for Abe to proceed with a further increase in the consumption levy. A weak expansion may raise the odds of fiscal or monetary support in the coming months.

“Japan’s economy is on course for a rebound in the July-September period,” Hiroaki Muto, a senior economist at Sumitomo Mitsui Asset Management Co. in Tokyo, said before the report. “A further increase in the sales tax is a foregone conclusion unless the economy contracts next quarter.”

The economy is forecast to shrink an annualized 4.4 percent this quarter after 6.7 percent growth in the first three months of the year. Economists project a 2.2 percent expansion in the July-September period.

Abe will base his decision on raising the sales tax to 10 percent in October 2015 from 8 percent now on economic data next quarter.

To contact the reporter on this story: Keiko Ujikane in Tokyo at [e-mail]

To contact the editors responsible for this story: Paul Panckhurst at [e-mail] Andy Sharp, James Mayger