Japan factory output contracts as expected in Jan, retail sales jump

Published 02/27/2025, 08:53 PM
© Reuters.

Investing.com-- Japanese industrial production declined in January, largely in line with market expectations, while retail sales jumped as expected on strong private spending, government data showed on Friday.

Industrial production fell 1.1% month-on-month in January, slightly more than expectations a 1.0% decline, and compared to a 0.2% contraction seen in the prior month.

Manufacturers project a 5.0% output increase in February, followed by a 2.0% decrease in March, data showed.

On the consumer front, Japanese retail sales jumped 3.9% year-on-year in January, in line with expectations higher than the 3.5% rise seen in the prior month. The print also showed retail sales growing at their fastest pace since Feb 2024.

These developments come amid concerns over U.S. trade tariffs from the Donald Trump administration, which could impact Japan's export-driven economy.

Last month, the Bank of Japan (BOJ) raised its short-term policy rate from 0.25% to 0.5%, the highest level in 17 years, signaling a shift from prolonged monetary stimulus.

Inflation in the country has remained well above the central bank's target range, and the central bank has indicated plans for additional rate hikes if its economic outlook aligned with expectations in the coming months.



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