Japanese factory output rose 0.1 percent in July, and the makers surveyed by the ministry say it will rise 6.4 percent in August and fall 4.2 percent in September

Japanese factory output barely moved in July. The seasonally adjusted production index came in at 104.7 on a 2020 base, up 0.1 percent on June, and the ministry's own one-line verdict is that industrial production fluctuates indecisively.

Before seasonal adjustment the picture is warmer. The original index stands at 110.6, which is 4.1 percent above July last year, and shipments are up 4.8 percent on the same basis.

The month itself

Shipments rose 2.2 percent on the month to 103.5. Inventories rose 0.5 percent to 98.1. The inventory ratio fell 1.7 percent to 104.7, which is the only one of the four seasonally adjusted series to move down.

Production machinery contributed most to the rise in output, followed by inorganic and organic chemicals and by electronic parts and devices. Pulling the other way were transport equipment other than motor vehicles, fabricated metals and plastic products.

Transport equipment excluding motor vehicles then turns up at the top of the list of industries that lifted shipments, having been top of the list that held production back. Both statements are the ministry's.

The forecast is doing something odd

Every month the ministry asks manufacturers what they plan to make. The survey taken in August puts production up 6.4 percent in August and down 4.2 percent in September.

That is a swing of 10.6 percentage points across two months, from a base that has just moved by a tenth of a point. It is also a revision: the July survey had put August at 4.5 percent, so the plan for the current month was marked up by 1.9 points in the space of four weeks.

One industry sits at the top of both forecast lists. Production machinery is named first among the contributors to the expected August increase, and first again among the contributors to the expected September decrease. It was also first on the list for July.

These are plans rather than outcomes. The ministry describes the exercise as a survey of planned production amounts, and the August preliminary report is what will settle it.