Japan Industrial Output Falls Slightly Less than Initially Thought

Japan’s industrial production dropped 0.4% mom in March 2026, compared with the flash figure of a 0.5% decline and after a 2.0% fall in the prior month. It was the second straight month of contraction amid disruptions from the Middle East conflict. Lower output was recorded for inorganic and organic chemicals (-8.6% vs -3.5% in February), general-purpose and business-oriented machinery (-4.3% vs -0.3%), and petroleum and coal products (-7.7% vs -4.1%). In contrast, production grew for transport equipment, excluding motor vehicles (13.4% vs -7.3%), production machinery (1.4% vs -1.7%), and electronic parts and devices (1.7% vs -3.5%). On an annual basis, output increased 2.4%, picking up from a 0.4% rise in February and marking the fastest pace since June 2025.

Japan’s industrial production fell 0.5% month-over-month in March 2026, missing market expectations of a 1.1% gain but easing from a 2.0% drop in the previous month, flash data showed. It marked the second straight decline in factory output, as external headwinds continued to weigh on the sector. The downturn came amid rising input costs and supply disruptions linked to the Middle East conflict. Industries that contributed to the decrease were inorganic and organic chemicals (-8.6% vs -3.5% in February), general-purpose and business-oriented machinery (-4.3% vs -0.3%), and petroleum and coal products (-7.7% vs -4.1%). In contrast, production grew for transport equipment, excluding motor vehicles (10.5% vs -7.3%), production machinery (1.3% vs -1.7%), and electronic parts and devices (1.7% vs -3.5%). On an annual basis, output increased 2.3%, picking up from a 0.4% rise in February and marking the fastest pace since June 2025.

Japan’s industrial production dropped 2.0% month-over-month in February 2026, compared with flash data of a 2.1% decline and after a 4.3% growth in the previous month. It marked the first contraction since last November, dragged by lower output for motor vehicles (-3.6% vs 8.1% in January), fabricated metals (-5.9% vs 6.0%), and electronic parts and devices (-3.5% vs 1.9%). In contrast, production grew for iron, steel and non-ferrous metals (2.4% vs 2.3%), chemicals, excluding inorganic, organic chemicals, and medicine (1.7% vs 3.6%), and pulp, paper and paper products (1.6% vs 0.7%). On an annual basis, output grew 0.4%, slowing from a 0.7% rise in January and pointing to the third straight month of increase.