Japan Feb. Industrial Output: Ideas Later.

Japan industrial output in Feb. falls 2.1% on month on weak autos

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TOKYO (Kyodo) -- Japan's industrial output in February fell 2.1 percent from the previous month, the first contraction in three months, dragged down by weak output in the motor vehicle sector, government data showed Tuesday, with the impact of the Iran conflict likely to be felt in the coming months.

The decrease followed an upwardly revised expansion of 4.3 percent in January. The Ministry of Economy, Trade and Industry maintained its basic assessment of industrial production from the month before, saying it "fluctuates indecisively."

Output dropped in 12 of the 15 sectors, falling 3.6 percent in the motor vehicle sector after an 8.1 percent rise in the previous month, amid a decline in orders for small trucks and a decrease in production of car engines for overseas markets, a ministry official said.

Reduced production of fabricated metals, including aluminum for industrial use, and of electronic parts and devices such as liquid crystal display panels contributed to the overall fall, while the iron, steel and nonferrous metals sector saw an expansion.

According to a poll of manufacturers, output is expected to rise 3.8 percent in March and 3.3 percent in April, the ministry said.

But the official cautioned that the survey, conducted in early March, may not have factored in the impact of the war against Iran launched by the United States and Israel on Feb. 28, which remains "highly unpredictable" and warrants "exceptional attention."

The Iran war and the effective closure of the Strait of Hormuz, a vital energy waterway, have disrupted supplies of crude oil and petroleum products to Japan, with the chemical sector facing difficulties procuring naphtha, a liquid derived from crude oil that is used to produce ethylene, a raw material for plastics and synthetic fibers.

Some automakers including Toyota Motor Corp. and Nissan Motor Co. are cutting domestic production of cars bound for Middle Eastern markets due to delayed shipments to the region in March, sources close to the matter said.

The seasonally adjusted index of production at factories and mines stood at 102.3 against the 2020 base of 100, the ministry said in the preliminary report.

In February, the index of industrial shipments dropped 1.6 percent to 100.5, while that of inventories edged up 0.3 percent to 98.1.

Article source: https://mainichi.jp/english/articles/20260331/p2g/00m/0bu/018000c