The Bank of Japan said it expects factory output to fall for the first time in three quarters in April-June on weak Asian demand, underscoring the fragile nature of the economic recovery.
Industrial production rose 1.5 percent in January-March from the previous quarter, helping the world’s third largest economy expand much faster than expected.
But the central bank offered a cautious view on the outlook for output, saying it may have briefly hit a soft patch as automakers see domestic inventories build up and steelmakers feel the pinch from sluggish Asian demand.
Industrial production will increase moderately reflecting domestic and overseas demand, albeit with some fluctuations,” the BOJ said in a monthly economic report released on Monday.
The central bank also warned there was “high uncertainty” on its forecast that output will rebound in the third quarter.