Japan’s industrial output falls for first time in 6 months

Bloomberg

Japan’s industrial production fell for the first time in six months in January, raising questions about the sustainability of Japan’s export-driven growth in the second half of 2016. Retail sales rose.
Industrial production fell 0.8 percent in January from a month earlier (forecast +0.4 percent). Output is forecast to rise 3.5 percent in February and drop 5 percent in March. Retail sales rose 0.5 percent from a month ago (forecast +0.3 percent).
The unexpected weakness in industrial output points to the risk of depending on external demand for recent economic growth. While domestic consumption has been weak in Japan, net exports added to growth in the second half of 2016, and shipments rose in January for a second straight month.
Data on household spending are due on Friday along with labor market and inflation data. “This is a reminder to be cautious for those who have been upbeat on Japan’s economy,” said Taro Saito, director of economic research at the NLI Research Institute. “There has been optimism globally that production and exports will pick up,” Saito said.
“We saw strong car sales around the world at the end of last year and that led Japan’s exports and production but the sales are not gathering speed.”