Asian Manufacturing

This news could add weight to the China slowdon thesis:

Japan's industrial production fell in May and South Korea's manufacturing grew less than expected as exports cooled and electronics companies trimmed stockpiles of digital cameras and cell phones.

Japan's production dropped a seasonally adjusted 2.3 percent from April, the Ministry of Economy, Trade and Industry said in a report today in Tokyo. South Korean output rose 0.5 percent, a statistics office report showed, lagging the 1.2 percent median gain predicted in a Bloomberg survey of 11 economists.

Manufacturers including Olympus Corp. and Samsung Electronics Co. say a glut of consumer electronics and falling prices are reducing profits. Economic expansion in Asia may slow to 5.25 percent this year from 6.25 percent last year as exports cool and record oil prices curb global demand, the International Monetary Fund said last month.

``We see exports in both Japan and Korea falling for the rest of this year and next,'' said Graeme Maxton, director at the Economist Intelligence Unit in Hong Kong, forcing both nations to rely more on domestic demand for growth.

Production is stalling elsewhere in Asia. Singapore's manufacturing fell 4.8 percent in May, the fourth drop in five months, according to a June 27 government report. In Taiwan, output fell 1.4 percent in May from a year earlier, the biggest drop in two years, a government report showed on June 23.

I wouldn't bank on any 'heavy lifting' from internal consumption in Japan though.