MNI BRIEF: Japan Feb Factory Output Posts 1st Rise In 4 Months

Japan's industrial output rose 2.5% m/m in February for the first increase in four months following January's 1.1% decline due to higher production of machinery and electronic parts and devices, although the rise of automobile output was small, data released by the Ministry of Economy, Trade and Industry showed on Monday.

Auto production rose 0.2% m/m in February for the second straight rise following 3.4% in January, clouding the outlook for demand amid U.S. tariff concerns.

Production machinery rose 8.2% in February for the first rise in two months following -10.2% in January.

Industrial output is a key piece of data for BOJ economists to assess and predict the pace of the current modest economic recovery as it reflects both external and domestic demand.

Based on its survey of manufacturers, METI projected that industrial production would rise 0.6% in March (revised up -2.0% forecast last month) before rising 0.1% in April.

Adjusting the upward bias in output plans, METI forecast production would fall 2.4% on month in March.

Based on this assumption, production would fall 1.1% in January-March, the fourth straight quarterly drop following -1.2% in Q4.

BOJ officials are paying attention to developments of the slowing U.S. economy and its impact on production due to its significant influence on Japanese exports and production.