Japan’s factory output fell for a second straight month in January as supply shortages continued to hurt manufacturers, adding to concern that the economy could shrink this quarter as omicron restrictions weigh on activity and the Russian invasion of Ukraine clouds the outlook.
Production slipped 1.3% from the previous month, with falls at automakers and iron and steel manufacturers making the biggest contributions to the drop and driving output below year-earlier levels, the industry ministry data showed Monday. Economists had expected a decline of 0.7%.
A separate report by the ministry showed that retail sales also fell 1.9% in January from the previous month compared with economists’ forecast of a 1.2% decrease. The weakness in sales shows consumers were less willing to spend than expected amid the country’s biggest virus wave.