The industrial production in Japan declined in January for the first time in six months, raising questions about the sustainability of growth in the second half of 2016, driven by exports. The industrial production recorded a decline of 0.8% mom against forecasts for 0.4% growth. It is expected that in February the index to rise by 3.5%, while in March to decrease by 5%.
The unexpected weakness in industrial production highlights the dependence of the growth of foreign demand. While domestic consumption in Japan was weak, the net exports contributed to growth in the second half of last year. Exports rose in January for the second consecutive month.
The latest data reminds about the dangers in front of the Japanese economy. At the global level, however, it reigns optimism that production and exports will accelerate.
The decline in January is strongly supported by the decline in production of cars, engines and other transport equipment, which contributed with drop of 4.7%.
On an annual basis, industrial production increased by 3.2% amid expectations for a rise of 4.3%.
Separate data showed that retail sales in Japan reported growth of 0.5% on a monthly basis, which exceeded expectations for 0.3% growth. On an annual basis they grow by 1%.
On Friday expected data on household spending and inflation and the labor market.