Japanese factory output declined more than expected in February as companies curbed output due to the Lunar New Year holiday. Japan’s industrial production fell 3.4 percent on month in February, data from the Ministry of Economy, Trade and Industry (METI) showed on Monday, worse than expectations for a 1.8 percent decline in a Reuters poll. That marked fastest pace of decline since June 2014.
“Clearly today’s report is a little worse than expected,” Jesper Koll, managing director and head of Japanese equity research at JPMorgan Securities told CNBC.
“As you pointed out these are volatile numbers, and we do know that there was a bit of an inventory overhang that Japanese companies have accumulated, remember the fiscal year starts on April the 1st, so clearing out inventories by cutting production, that’s exactly what corporate japan is doing, so they’re actually building a base for production increases in the new financial year,” he said.