2018.02.2723:25:00UTC+00Japan Industrial Output Drops In January

Japan's industrial output slumped in January from the previous month, government data showed, in an indication of a drop in corporate activity.

Industrial production declined 6.6 percent month on month in January. That followed a revised 2.9 percent rise in the previous month.

Transport equipment and general-purpose, production and business-oriented machinery contributed to the decrease, according to the ministry.

Manufacturers surveyed by the Ministry of Economy, Trade and Industry expect output to increase 9.0 percent in February but decline 2.7 percent in March, data showed.

According to Marcel Thieliant, senior Japan economist with Capital economics, the January slump suggests Japanese economic growth “may have paused this quarter”.

“Our best guess is that industrial output will fall by around 2 percent q/q this quarter, which would mark the sharpest drop since 2014's sales tax hike. While industrial output hasn't been the best guide to GDP growth in recent years, this suggests that the longest stretch of uninterrupted expansion since the late 1980s will come to an end this quarter”, Thieliant said.

Separate data showed Japanese retail sales increased 1.6 percent in January from the previous year.