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JP: Industrial Production
| Consensus | Consensus Range | Actual | Previous | Revised | |
| Month over Month | -2.0% | -3.5% to -0.5% | -2.1% | 2.2% | 4.3% |
| Year over Year | 0.4% | -1.2% to 1.9% | 0.3% | 2.3% | 0.7% |
Highlights
Japan's industrial production posted its first month-on-month drop in three months in February, down 2.1%, as largely expected, after an upwardly revised 4.3% jump in January (+2.2% in the initial reading) and a 0.6% rise (revised up from being flat) in December. The sharp increase in January was driven by a rebound in the output of passenger cars. It also reflected 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.
The monthly survey by the Ministry of Economy, Trade and Industry indicated that output would surge 3.8% on the month in March, led by solid demand for production machinery, communications infrastructure and computer chips, before rising a further 3.3% in April on the back of lingering demand for production machinery and communications infrastructure as well higher output of general machinery.
The ministry maintained its assessment 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 Feb industrial output -2.1% m/m (Jan revised to +4.3% from +2.2%); 1st fall in 3 months; median forecast -2.0% (range: -3.5% to -0.5%)
Japan Feb industrial output +0.3% y/y (Jan revised to +0.7% from +2.3%), 3rd straight rise; median forecast +0.4% (range: -1.2% to +1.9%)
Japan METI keeps view: industrial output taking one step forward and one step back
Japan METI forecast index: March industrial output +3.8% m/m (adjusted for upward bias), April +3.3%
Japan METI: Feb industrial output m/m drop led by trucks, engines, aluminum products, liquid crystal display panels
Japan Feb industrial output: 12 out of 15 industries post fall, 3 are up
Market Consensus Before Announcement
Japan’s industrial production is expected to fall sharply on the month in February, marking its first decline in three months as exports slow following front-loaded activity ahead of the Lunar New Year that boosted output in the previous month.
Output is seen falling 2.0 percent on the month in February after a revised 4.3 percent rise in January, which was up from an initial 2.2 percent increase. The January rebound was also reflected in a surge in exports of computer chips, non-ferrous metals and plastics ahead of holidays in China and other parts of Asia around the Feb. 17 Lunar New Year.
On a year-on-year basis, production is expected to rise 0.4 percent in February, compared with a revised 0.7 percent increase from an originally reported 2.3 percent gain in January.
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.