Factory output in Japan slides to nine-month low | Business| Economy and finance news from a German perspective | DW | 30.03.2015
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Factory output in Japan slides to nine-month low

Japan's industry is losing steam, with industrial production in February dropping by 3.4 percent over January. Monday's data follow lackluster inflation figures published on Friday.

Industrial production in Japan for the month of February fell by a worse-than-expected 3.4 percent over January, official data showed Monday. It is the worst drop since June 2014 and a steeper decline than analysts had expected.

Japan's industry ministry left its outlook unchanged, saying in its February report that "industrial production shows signs of increase at a moderate pace." But Marcel Thieliant at Capital Economics said in a note on the release of the data that "these forecasts tend to overestimate the future level of output, so the actual results may be even weaker."

Monday's data came on the back of weak consumer price data released last Friday. Annual core inflation for February in the world's third-biggest economy stood at 2 percent, down from 2.2. percent in January.

The figure is in line with the Bank of Japan's 2 percent target, but if the effects of a rise in sales tax last April are excluded, the rate of inflation would be zero.

The governor of the Bank of Japan, Haruhiko Kuroda, acknowledged this month that dragging the country out of years of deflation was proving to be "very challenging", and he warned that inflation may temporarily fall to zero.

ng/cjc (AFP, Reuters)

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