Japan's Manufacturing Activity Will Likely Contract This Quarter

Japan's Manufacturing Activity Will Likely Contract This Quarter

30 March 2016, 19:39
Roberto Jacobs
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Japan's Manufacturing Activity Will Likely Contract This Quarter

Data released earlier today by Japan's Ministry of Economy, Trade and Industry (METI) showed that Japanese industrial output fell sharply in February, falling by fastest rate since 2011. The combined output from Japan's mines, factories and utilities tumbled 6.2% m/m in February, missed expectations for a decline of 5.9 percent and followed the 3.7 percent increase in Jan.

On a yearly basis, industrial production fell 1.5 percent - beating forecasts for a decline of 1.7 percent following the 3.8 percent contraction in the previous month. The METI maintained its assessment of industrial production, saying that it has been fluctuating indecisively.

The ministry estimates that production for the three months ending Thursday may shrink. This casts a shadow over gross domestic product for the whole quarter, underscoring Japan’s struggle to bounce back from a contraction at the end of last year.

"The slump in industrial output in February suggests that manufacturing activity will contract this quarter. This means there is a growing risk that the economy won’t expand this quarter after the contraction in the final three months of last year." Marcel Thieliant, senior Japan economist at Capital Economics, wrote in a note.

The material has been provided by InstaForex Company - www.instaforex.com

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