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Japan’s worst factory output slump in two years heaps pressure on economy

Smoke rises from a factory during the sunset at Keihin industrial zone in Kawasaki, Japan, January 16, 2017. REUTERS/Toru Hanai/

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  • May output drops 7.2% m/m, much weaker than expected
  • Production of cars, electrical and general machinery slump
  • Manufacturers see output recover in June, July

TOKYO, June 30 (Reuters) – Japan’s factory output posted the biggest monthly drop in two years in May as China’s COVID-19 lockdowns and semiconductor and other parts shortages hit manufacturers, adding more pressure on an economy struggling to mount a strong recovery.

The decline also highlights the challenge the world’s third-largest economy faces in overcoming supply disruptions and persistently high prices of raw materials and energy that analysts say could weaken global demand.

Factory output slumped a seasonally adjusted 7.2% in May from the previous month, official data showed on…

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