February 26, 2024


It's the Technology

POLL-Japan Feb factory output seen up for first time in 3 months, but outlook less rosy


By Kantaro Komiya

TOKYO, March 25 (Reuters)Japan’s factory production likely rose in February for the first time in three months as supply constraints eased slightly, a Reuters poll showed, but analysts say the Ukraine crisis poses downside risks to the outlook.

Industrial production likely increased 0.5% in February from the previous month, the median forecast in the poll of 18 economists showed on Friday.

That would mark the first growth in three months and follow a 0.8% fall in January.

“The impact of semiconductor and component shortage was still remaining, especially among automakers, but the situation apparently eased compared from January,” said Shumpei Fujita, an economist at Mitsubishi UFJ Research and Consulting.

Still, he said output was probably weaker in the current month and beyond, referring to a series of disruptions to Japan Inc’s production including from a cyberattack and an earthquake.

Toyota Motor Corp 7203.T, the world’s largest carmaker, halted all domestic factories for one day on March 1 after a supplier was hit by a computer virus attack.

On March 16, a powerful earthquake hit northeastern Japan, causing a temporal power outage in over 2 million buildings and plant shutdowns at Toyota and Murata Manufacturing Co Ltd 6981.T among many other firms.

Some analysts said further headwinds from the Ukraine crisis, such as surging raw material prices and Japan’s trade sanctions on Russia, may temper the recovery in industrial output even as supply bottlenecks ease further.

Elsewhere in the poll, retail sales were forecast to have fallen 0.3% in February from a year earlier to mark the first decline since September, on extended COVID-19 curbs that lasted until Monday.

The industry ministry will release factory output data on March 31 at 8:50 a.m. (March 30 at 2350 GMT) and retail sales data on March 30 at 8:50 a.m. (March 29 at 2350 GMT).

Japan’s unemployment rate and jobs-to-applicants ratio were seen unchanged in February at 2.8% and 1.20, respectively, the poll also showed. Jobs data are due on March 29 at 8:30 a.m. (March 28 at 2330 GMT).

(Reporting by Kantaro Komiya Editing by Shri Navaratnam)

(([email protected]; Twitter: @kantarokomiya;))

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