Japan’s industrial production contracted -2.1% mom in February, matching expectations and marking the first decline in three months. The drop was driven largely by weaker automobile output, with production falling across 12 of 15 sectors.
The Ministry of Economy, Trade and Industry maintained its assessment that output “fluctuates indecisively,” pointing to a lack of clear direction rather than a sustained downturn. Forward-looking indicators remain more constructive, with manufacturers expecting output to rebound by 3.8% in March and 3.3% in April.
Elsewhere, domestic demand signals were softer, with retail sales falling -0.2% yoy against expectations of 0.8% yoy, highlighting cautious consumption. However, the labor market remains resilient, with the unemployment rate edging down from 2.7% to 2.6%.
