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JP: Industrial Production
| Consensus | Consensus Range | Actual | Previous | |
| Month over Month | 5.3% | 4.0% to 7.0% | 2.2% | -0.1% |
| Year over Year | 5.2% | 4.2% to 7.2% | 2.3% | 2.6% |
Highlights
Japan's industrial production rose a solid 2.2% on the month in January, driven by a rebound in the output of passenger cars. It marks the first rise in three months after being nearly flat with a 0.1% slip in December as the impact of stiff Trump tariffs on automobiles and metals emerged more in the final quarter of 2025. Yet it was weaker than the median economist forecast of +5.3% and below the forecast range of +4.0% to +7.0%.
The rebound in January also reflects rush exports of computer chips, non-ferrous metals and plastics ahead of the holidays in China and some other Asian countries around the Feb. 17 Lunar New Year, as seen in January trade data released last week.
The monthly survey by the Ministry of Economy, Trade and Industry indicated that output would slip back 1.9% on the month in February, led by computer chips and metal products, before dipping a further 2.6% in March due to a pullback in electric and information equipment (including radars) as well as general machinery.
The ministry repeated that industrial output was"taking one step forward and one step back." The last change was made in the July 2024 report, when it upgraded its view.
Details:
Japan Jan industrial output +2.2% m/m (Dec -0.1%); 1st rise in 3 months; median forecast +5.3% (range: +4.0% to +7.0%)
Japan Jan industrial output +2.3% y/y (Dec +2.6%), 2nd straight rise; median forecast +5.2% (range: +4.2% to +7.2%)
Japan METI keeps view: industrial output taking one step forward and one step back
Japan METI: Jan industrial output m/m rise led by passenger cars, plastics, chemicals
Japan Jan industrial output: 13 out of 15 industries post rise, 2 are down
Market Consensus Before Announcement
Japan’s industrial production is expected to rebound sharply on the month in January, marking the first increase in three months, as front-loaded activity ahead of the Lunar New Year prompted a surge in output.
January production is forecast to jump about 5.3 percent after edging down 0.1 percent in December. In December, the impact of stiff U.S. tariffs on automobiles and metals imposed in the fourth quarter of last year undermined exports and weighed on output, although the pace of decline was easing.
The Ministry of Economy, Trade and Industry (METI) also maintained its long-held assessment that industrial output is “taking one step forward and one step back” in December, a view it has kept since upgrading its outlook in July 2024.
On a year-on-year basis, January output is also expected to rise for a second straight month, up 5.2 percent after a 2.6 percent increase in December.
Definition
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.
Description
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.