TOKYO: Japanese industrial production contracted for the first time in three months in February, the latest data indicating continued sluggishness in Japan’s economy. The ministry said it expects output to fall again in March, by 2.0%, before increasing 3.6% in April, based on surveys of companies.
The figures come on the heels of data showing anemic consumption and a fall in inflation to zero in February, adding to the picture of gloom more than two years after Prime Minister Shinzo Abe’s launched his pro-growth economic strategy called Abenomics.
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Industrial output, covering everything from cosmetics and computers to semiconductor and construction cranes, slid 3.4% from the previous month, according to government data released Monday. The fall was much larger than a decline of 1.8% expected by polled economists.
The drop in production indicates that the slow recovery in household spending has left firms wary of expanding operations and capital investment, though Japan’s economy ministry left its assessment of industrial output unchanged, saying it was “gradually picking up.”
The prime minister’s policy program aims to boost exports and business investment, raise wages and lift the nation out of a more than a decade of deflation.
But the strong expectations for Abenomics haven’t been matched by the reality so far, 27 months after Mr. Abe came into office. The sharply lower yen he has helped engineer has raised import prices and reduced consumers’ purchasing power, and firms remain cautious on making investment and boosting output in Japan.
Japan fell into a recession last year, in the wake of the first sales tax increase in 17 years, and is only recovering at a slow pace.
