Japan industrial production returns to growth in February

Industrial output in Japan bounced back last from from a surprise January contraction to notch growth that was well above expectations last month.

The preliminary reading from the Ministry of Economy, Trade and Industry showed industrial production rose 2 per cent month on month in February, rebounding from contraction of 0.8 per cent in January. A median poll of economists from Reuters had predicted a gain of only 1.2 per cent.

A recovery in durable consumer goods helped drive the headline gauge higher, with production swinging from a 4 per cent month-on-month fall to a 4.9 per cent rise last month.

Output for non-durable consumer goods accelerated from marginal growth to a rise of 3.8 per cent in February. Production in mining also recovered from slight contraction to post growth of 2 per cent.

The annual pace of production also ratcheted up to the fastest pace since March 2014, posting a 4.8 per cent rise compared to January’s growth of 3.7 per cent.

The yen firmed as much as 0.2 per cent against the dollar following the morning’s data releases – which also included inflation, household spending and employment – before paring back to be 0.1 per cent stronger at ¥111.79.