Japan's Industrial Production data for February is due 30 March and is expected to see larger than expected fall. METI revised the projection for February Industrial Production to -5.20% m/m from -4.10% m/m. Transport equipment, electronic parts and devices and general-purpose, production and business oriented machinery are likely be the main drag.
This is especially the case after taking into account JPY strength. Trade weighted JPY is higher both on a y/y and m/m basis, even after the BoJ negative rates implemented in January. The Japanese yen gained and the USD/JPY dropped below the manufacturers’ assumption of a FX rate of 118.
The BoJ also downwardly revised its total assessment on economy somewhat in March. The central bank stated that the country’s economy continues on its modest rebound trend even if exports and production have been weak mainly because to impact of slowdown in emerging nations. According to the BoJ, production and exports will continue to be sluggish for some time.
“We expect February industrial production to come in with a fall of 3.80% m/m and -2.90% y/y,” said 4castweb in a report.
The material has been provided by InstaForex Company – www.instaforex.com