Japan factory output sees record drop****

TOKYO, April 28 (AFP): Japan's central bank slashed its growth forecast Thursday as factory output and consumer spending saw their biggest ever falls in the wake of the massive March 11 earthquake and tsunami disaster. Industrial production took a 15.3-per cent dive from February to March, the sharpest drop since records began in 1953, after the calamity crippled supply chains and forced companies to shutter plants. The Bank of Japan (BoJ) cut its growth forecast for this fiscal year to 0.6 per cent from its earlier 1.6 per cent projection, although it predicted a rebound next year as Japan rebuilds its shattered northeast coastline. "As a result of the disaster, the economy will inevitably continue to face strong downward pressure for the time being," mainly due to damage to production facilities, the BoJ said in its twice-yearly outlook. It predicted that in the short term "corporate profits will likely fall significantly as a result of the substantial decline in exports and production" as well the effects of higher global commodity prices. "The earthquake has led to the loss of a large number of production facilities in widespread areas directly affected by the disaster," it said. "In addition, difficulties in procuring materials and parts have disrupted supply chains on a national scale," it said, also pointing at ongoing power shortages that could worsen in the hot summer months.