Japan Consumers Spend Less as Output Falls

Japanese industrial output fell the most since the March 2011 earthquake, highlighting the widening impact to the economy of April’s sales-tax increase.

Industrial output dropped 3.3 percent in June from May, the trade ministry said today in Tokyo, more than twice the median forecast for a 1.2 percent contraction in a Bloomberg News survey of 31 economists.

The manufacturing sector has cut back in response to a slump in consumer spending and a failure of exports to pick up even after an 18 percent drop in the yen last year. Honda Motor Co. (7267) and Nissan Motor Co. (7201) this week reported jumps in profit, showing how the weaker currency is contributing to earnings gains without bolstering the economy.

Bloomberg

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