Japan's factory output shrank at the fastest pace in eight months in January as declining overseas demand took a heavy toll on key industries such as auto and semiconductor equipment.
In contrast, retail sales posted their fastest growth in nearly two years, separate data showed, highlighting the divergent paths between soft manufacturing and robust service-sector activity.
"Weak export-bound production and a recovery in consumption continue to be the two main focuses of Japan's economy," said Atsushi Takeda, chief economist at Itochu Economic Research Institute. He expects the new Bank of Japan leadership will be slow to tweak monetary policy amid the uncertainty.