Economy, Business, Finance News, Technology, Telecommunication, Smartphones, Tablet|Finance | Economy | Money | Financial Market | Stock Market | Central Banks | World Economy | World Finance | News Summary | News Aggregator | Handphones | Technology | Telecommunication | Internet | Broadband | Wifi | Wimax | Bluetooth | Smartphones | Tablets | Computers | PC | Netbook | Notebook

Japan’s economic recovery faltered in May, as factory output fell and the nation’s jobless rate rose for a third straight month.

Industrial production in the world’s second biggest economy dropped 0.1 percent from the previous month, the government said Tuesday.

The result marks the first drop in three months and just misses Kyodo news agency’s average forecast for a flat reading.

Lower factory output of large passenger cars, semiconductor-related machinery and flat-panel display machinery contributed to the month’s retreat, according to the Ministry of Economy, Trade and Industry.

Meanwhile, the country’s seasonally adjusted jobless rate climbed to 5.2 percent, up from 5.1 percent in April and the highest level since December.

The number of jobless stood at 3.47 million, which is unchanged from the previous year, according to the Ministry of Internal Affairs and Communications.

Those with jobs fell 0.7 percent to 62.95 million.

The results reflect a still-fragile recovery for Japan’s economy, where an export boom has been slow to translate into sustained improvements for workers and families.

Brisk overseas demand also wasn’t enough in May for factories to make up for the fading effects of government stimulus measures.

The drop in industrial production, however, is expected to be temporary. The government predicts the figure to rise 0.4 percent in June and 1 percent in July.

A separate government report showed household spending in May fell a real 0.7 percent from a year earlier as incomes retreated.

Average monthly household income fell a real 2.4 percent from a year earlier to 421,413 yen ($4,714).

A labor ministry report pointed to some bright spots in the jobs picture.

The ratio of job offers to job seekers stood at a seasonally adjusted 0.50 in May, up from 0.48 in April.

That means there were 50 positions available for every 100 job seekers

Related Posts:

• Google side project, Person Finder, helps in Japan quake
• China’s economy grows by 11.9% for the first quarter
• USA October month US$176 billion deficit
• US Fed struggles to bolster economy
• Malaysian Economy may contract by1.19% in 2009

A day after European leaders agreed on a $900 billion rescue package, credit rating agency Moody’s cautioned investors that two of the euro zone’s hardest hit countries aren’t out of the woods just yet.

In the last month, Moody’s has said several times that debt-strapped Greece and Portugal are under review for future downgrades to their credit ratings. But in a report to investors Monday, the agency said those downgrades could occur within a month.

Greece’s downgrade would probably be more “substantial” than previously indicated, with cuts to the Baa range, or just above junk status, the report said.

“This will depend on developments in the Greek economy once the fog of financial panic, support-mobilisation and street demonstrations dissipates,” Moody’s wrote. “The country’s debt is large but not unbearable; however, the required adjustment is obviously very painful, and short-term economic prospects are clearly dismal.”

Portugal’s possible downgrade is less severe than that of Greece, as Moody’s said it is considering a one-notch cut to Aa3 from Aa2. Both ratings are so-called investment grade and considered relatively low risk.

Both reviews will be decided on within the next four weeks, Moody’s said.

Last month, Moody’s cut the rating on Greece’s government bonds down one notch to A3 — still an investment grade, although not an entirely high-quality, level. At the time, Moody’s cautioned that further downgrades were possible as it continues to review Greece’s economic outlook.

Credit ratings are used by investors to evaluate the risk of a default on government bonds. The yield on Greek bonds recently soared to record highs, as investors worried that the country could default on its debt. Another cut to Greece’s credit rating could fan the flames of investors’ fears, making it even more difficult for the country to sell bonds.

In its report on Monday, Moody’s said it also has a negative outlook for Ireland, which is struggling with debt but has greater economic and institutional strength than some of the beleaguered countries in Europe’s “southern periphery.”

On April 27, another credit rating agency, S&P slashed Greece’s rating to junk status and a day later, it cut Spain’s rating to a low-rung investment grade. To top of page

Related Posts:

• Greece announces cost cutting measures
• Greece to get €30bn from Eurozone
• Warren Buffett’s Berkshire’s rating cut
• EU summit rejects more stimulus
• EU’s new law may hurt palm oil exporters

China’s economy revved into high gear during the first quarter of 2010, growing 11.9% compared with a year ago, a spokesman for the National Statistics Bureau said Thursday.

The nation’s gross domestic product — a broad measure of economic output — gained 1.2% from the fourth quarter of 2009.

“The momentum of national economic recovery has further expanded, which has laid a good foundation for reaching the targets set for the whole year,” spokesman Li Xiaochao said.

The growth was fueled by industrial growth — 22% for heavy industry and 14% for light industry — and a nearly 18% expansion in consumer retail sales.

The figures mark a return to double-digit economic growth for China, which saw its white-hot economy slump to merely robust in 2009. China was able to maintain moderate economic growth even as the U.S. and Japanese economies were in recession last year.

In 2007, China’s gross domestic product grew 13%.

China and the yuan: What’s at stake

Despite the explosive start to the year, Li tried to dampen expectations.

“This 11.9% is higher than the 8% target set by the National People’s Congress set for the whole year but the latter half of the year will definitely face challenges because the base GDP figure of late last year is higher,” Li said.

The high levels of economic growth China has been experiencing typically result in inflationary pressures, raising prices and ultimately slowing expansion.

“China’s drivers of economic growth should become more balanced as policymakers seek to transition from rapid growth to longer-term stability,” said Jing Ulrich, a China equities and commodities expert with J.P. Morgan. “Higher than expected inflation could necessitate more aggressive tightening, while global trade disputes could hinder the export recovery.”

“Despite China’s positive outlook, some risks remain to sustained economic recovery,” Ulrich said. “Excessive tightening in the property sector could dampen home sales, which would be negative for commodities, employment and housing-related consumption.”

Related Posts:

• Japan Outlook : Output Down, Jobless Up
• USA October month US$176 billion deficit
• CNOOC to raise US$11.7bil to fund
• US Fed struggles to bolster economy
• Coke faces hurdle expanding into China market