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| Version 4 | Version 5 |
|---|---|
| Big slump in Japan factory output | Big slump in Japan factory output |
| (about 2 hours later) | |
| Japan's industrial output declined 9.6% in December - the biggest contraction since records began - as exports slumped due to the global downturn. | Japan's industrial output declined 9.6% in December - the biggest contraction since records began - as exports slumped due to the global downturn. |
| Japan's Economics Minister Kaoru Yosano said the situation was unprecedented and that the drop in factory output "was likely to continue". | Japan's Economics Minister Kaoru Yosano said the situation was unprecedented and that the drop in factory output "was likely to continue". |
| The unemployment rate also rose in December to 4.4%, a three-year high. | The unemployment rate also rose in December to 4.4%, a three-year high. |
| Official figures showed that 2.7 million people in Japan were without work, 400,000 more than a year ago. | Official figures showed that 2.7 million people in Japan were without work, 400,000 more than a year ago. |
| 'Bold steps' | 'Bold steps' |
| Japan's economy slipped into its first recession in seven years in the third quarter of last year. | Japan's economy slipped into its first recession in seven years in the third quarter of last year. |
| We must watch if a worsening of the economy pushes Japan into a deflationary spiral Tatsushi Shikano, Mitsubishi UFJ Securities Hitachi cutting 7,000 jobs | We must watch if a worsening of the economy pushes Japan into a deflationary spiral Tatsushi Shikano, Mitsubishi UFJ Securities Hitachi cutting 7,000 jobs |
| Exports have dropped as worldwide demand for Japanese products, such as cars and electrical equipment, has fallen sharply. | Exports have dropped as worldwide demand for Japanese products, such as cars and electrical equipment, has fallen sharply. |
| Prime Minister Taro Aso has told parliament he will take bold steps to ensure Japan is the first country to emerge from the global crisis. | Prime Minister Taro Aso has told parliament he will take bold steps to ensure Japan is the first country to emerge from the global crisis. |
| The slump in industrial output knocked confidence among Japanese investors, and the country's main Nikkei index ended Friday down 3% or 257 points at 7,994. | The slump in industrial output knocked confidence among Japanese investors, and the country's main Nikkei index ended Friday down 3% or 257 points at 7,994. |
| Deflation fears | Deflation fears |
| Official data also showed a big drop in the rate of inflation, increasing the likelihood of deflation. | Official data also showed a big drop in the rate of inflation, increasing the likelihood of deflation. |
| Honda is just one of a growing number of Japanese firms to see falling sales | |
| Japan's annual core consumer inflation slowed to 0.2% in December from 1% in November. | Japan's annual core consumer inflation slowed to 0.2% in December from 1% in November. |
| Economists fear falling prices will deter consumers from making major purchases, ultimately worsening the recession. | Economists fear falling prices will deter consumers from making major purchases, ultimately worsening the recession. |
| The Bank of Japan has already warned that deflation will be a risk until 2011 and has cut interest rates to just above zero. | The Bank of Japan has already warned that deflation will be a risk until 2011 and has cut interest rates to just above zero. |
| "Weakness in the overall economy will persist in January-March, and the degree of worsening depends much on how exports turn out," said Tatsushi Shikano, senior economist at Mitsubishi UFJ Securities. | "Weakness in the overall economy will persist in January-March, and the degree of worsening depends much on how exports turn out," said Tatsushi Shikano, senior economist at Mitsubishi UFJ Securities. |
| "It is already a consensus view that core consumer inflation will turn negative soon, but we must watch if a worsening of the economy pushes Japan into a deflationary spiral even though the Bank of Japan sees no signs of that happening right now." | "It is already a consensus view that core consumer inflation will turn negative soon, but we must watch if a worsening of the economy pushes Japan into a deflationary spiral even though the Bank of Japan sees no signs of that happening right now." |
| Big losses | |
| The gloomy official economic data came as three more Japanese companies reported poor financial figures. | |
| Honda, the country's second-largest carmaker, said profit plunged 89% in the third quarter as global sales slowed sharply. | |
| The company made a net profit of 20.24bn yen ($226m; £158m) in the three months to the end of December, compared with 200bn yen a year earlier. | |
| Meanwhile, electronics and engineering group Hitachi warned that it now expects to make a loss of 700bn yen for the financial year to 31 March. | |
| All Nippon Airways, the country's second-largest carrier, said it expects to report its first annual loss in six years. | |
| Their reports came a day after both Sony and Toshiba warned that they would make an annual loss, while Nintendo cut its profit forecast. |