Industrial production unexpectedly dropped in February, undercutting signs of an economic rebound in the first quarter as policymakers assess whether to apply further stimulus.
Factory output slid 1.2 percent from the previous month, the Ministry of Economy, Trade and Industry said Friday, after a 1.9 percent gain in January. The median estimate in a Bloomberg survey was for a 1.3 percent increase. The unemployment rate fell to 4.5 percent and consumer prices excluding fresh food unexpectedly rose 0.1 percent, government reports showed.
The Bank of Japan has come under pressure by a group of lawmakers to bolster stimulus efforts, with a board member this week questioned on the idea of adopting a Federal Reserve-style "operation twist," swapping short-term bonds for longer-term securities. While the first gain in five months in consumer prices prompted the yen to strengthen, inflation remains distant from the 1 percent goal the BOJ announced last month.