Japan industrial output falls for first time in a year

Japan’s factory output has fallen for the first time in a year, providing further evidence of the country’s fragile economic recovery.

Industrial production fell by 0.9% in February, following strong growth in January, official figures showed.

The fall was bigger than analysts had expected and comes as the economy struggles against deflation.

Separately, figures showed Japan’s unemployment rate remained unchanged in February at 4.9%.

“The first decline in the past year in industrial output is a slightly worrying factor,” said Taro Saito at the NLI Research Institute.

He said the drop was due to a number of factors, including weaker car and LCD television production.

“But my overall evaluation is that the economy is on the right track to recovery, although at a slowing pace,” Mr Saito added.

Japan’s economy grew by 0.9% in the last three months of last year, but the recovery has been heavily reliant on government stimulus measures, analysts say.

There are fears that the recovery may slow when the stimulus measures are removed.

Prices in Japan have been falling for 12 months, which is bad news for economic growth as consumers tend to delay purchases until prices fall further.

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