Japan's industrial production fell in February, undercutting economists' forecasts, as the first sales tax hike since 1997 risks stalling the economic recovery.
Output fell 2.3 percent from the previous month, the steepest drop in eight months, the Ministry of Economy, Trade and Industry said Monday. The median estimate of 28 economists was for a 0.3 percent gain. A separate gauge of manufacturing fell in March for a second straight month.
While the weakness partly reflected disruptions from heavy snowfall, the data showed manufacturers are bracing for a slump in demand following Tuesday's sales tax increase. Inventories fell for a seventh straight month, lessening the likelihood of even sharper output cuts as the higher consumption levy pushes the economy into a one-quarter contraction in April-June.