Japan's industrial output rises 0.6 % in July

this slowdown indicates production has entered into a minor adjustment period before full recovery.”

According to producers polled by the government, production was expected to increase by 2.8% in August but decrease 2.4% in September.

Did the guy who made the first statement not read their own survey? How does a 2.8% increase in August, followed by a 2.4% decline in September equal "full recovery". These guys' predictions and assurances are worthless. The hallowing out, started by the Tohoku/Fukushima disasters, has taken on momentum, made greater by the strong yen.

The hollowing out started way before the Fukushima disasters, the hollowing out was pretty much moving into full swing by the time fukushima happened

ExportExpert -- agree to a certain extent. But Tohoku/Fukushima and the disruption it caused to the companies supply chains, especially the car companies, has pushed the hallowing out to a new level. When Toyota indicates that its annual production goal for Japan is no longer sacred, then you know things have changed dramatically and structually. Toyota was the embodiment of Japan Inc., and even they are moving production off shore. And Nissan and Honda have accelerated their plans to do so.

The automobile and consumer electronics industries get a lot of attention, and when they suffer setbacks, people make a fuss about the "hollowing out" of Japanese industry. But, cars and consumer electronics make up only some 10% of Japan's exports. The bulk of Japan's exports are not of these, but of capital goods and materials. For instance, there are some 40 nuclear reactors under construction in the world, and these all have to order their reactor containment vessel from a company in Hokkaido, which alone has the technology to manufacture them. A company in Kochi Prefecture produces 70% of the world's ceramic capacitor paper. The new aquarium in Dubai, probably the world's largest, has to order the acrylic panels from a company in Kagawa Prefecture. And so on and so forth. They make such a fuss about China or even Korea "overtaking" Japan, but Japan actually has a growing trade surplus with these countries, if you include the trade that goes into China from Japan via Taiwan and Hong Kong. And this is because China and Korea have to order capital goods and materials from Japan, which they then use in their factories to produce the cheap goods they export to the US, Europe, emerging markets, etc. So, the more China and Korea export, the more Japan benefits. As long as Japan keeps on manufacturing these unique, high-quality, high-tech capital goods the way only the Japanese can, Japanese industry will not "hollow out". And, another thing to keep in mind is that Japan's economy is not at all "export-dependent". It's export dependence factor is only around 11% to 15%, as compared with 33% for Germany, 23% for Canada, 34% for China, 50% for Korea, etc. Japan's largest market is still Japan itself...

The hollowing out started way before the Fukushima disasters, the hollowing out was pretty much moving into full swing by the time fukushima happened.

Japan's industry isn't hollowing out. That's just propaganda.