Japan's industrial production fell a seasonally adjusted 0.1 percent on the month in April after an upwardly revised 4.4 percent jump in March, as output of the transport industry excluding automobiles (aircraft engine parts) slumped in payback for a sharp gain in the previous month and vehicle output also slipped from a sharp rebound in March when production resumed after two months of suspension at Toyota group firms over a safety scandal. It was weaker than the median forecast of a 1.6 percent rise, with some having projected a slight drop.

Of the 15 industries, seven posted increases from the previous month and eight marked decreases.

From a year earlier, factory output posted a sixth straight drop, down 1.0 percent, slightly firmer than a consensus forecast of a 1.2 percent drop (some had expected a rebound), after an upwardly revised 6.2 percent slump in the prior month.

The Ministry of Economy, Trade and Industry's survey of producers indicated that output is expected to post a solid 2.3 percent rise in May before falling a sharp 5.6 percent in June.

The ministry maintained its assessment after downgrading it for the first time in six months for the January data, saying industrial output"has weakened while taking one step forward and one step back." The METI repeated that it will keep a close watch on the effects of global economic growth and resumed automobile production.

Econoday's Relative Performance Index stands at plus 3, just above zero, which indicates the Japanese economy is performing largely as expected. Excluding the impact of inflation, the RPI is minus 1.

Japan's industrial production is forecast to post a second straight rise on the month in April, up 1.6 percent after an upwardly revised 4.4 percent jump in March, thanks to resumed auto output after about months of suspension through February at Toyota group firms over a safety scandal. From a year earlier, factory output is expected to post a sixth straight drop (a 10th in the past 12 months), down 1.2 percent, with the pace of decline easing from an upwardly revised 6.2 percent slump in the prior month. The METI's survey of producers released last month indicated that output is expected to slip back 1.0% in April before a solid 4.4% rebound in May.

Industrial Production measures the physical output of the nation's factories, mines and utilities. Factories manufacture various products, and the industrial production indexes have been prepared as a comprehensive indicator of wide-ranging production activities for such products and are regarded as some of the most important among economic indexes.

Investors want to keep their finger on the pulse of the economy because it usually dictates how various types of investments will perform. The stock market likes to see healthy economic growth because that translates to higher corporate profits. The bond market prefers more subdued growth that won't lead to inflationary pressures. By tracking economic data such as industrial production, investors will know what the economic backdrop is for these markets and their portfolios.

Industrial production provides key industry data for this export-dependent economy. The data are issued twice a month-a preliminary estimate at the end of the month for the preceding month and a revised estimate about two weeks later. All products, whether sold domestically or abroad, are included in the calculation of industrial production. Industrial production is highly sensitive to the business cycle and can often predict future changes in employment, earnings and income. For these reasons industrial production is considered a reliable leading indicator that conveys information about the overall health of the economy. This report has a big influence on market behavior. In any given month, one can see whether capital goods or consumer goods are growing more rapidly. Are manufacturers still producing construction supplies and other materials? This detailed report shows which sectors of the economy are growing and which are not.