Vastavam web: Japan’s industrial output rose more than expected in March, government data showed on Friday, but a large increase in inventories of electronic parts suggests manufacturers may have to cut production, hurting economic growth.Separate data showed retail sales rose less than expected in a blow to hopes for higher consumer spending. Demand for labor, however, increased in March as companies continue to struggle to find workers.“The headline figure is better than expected, but I am not confident about the outlook,” said Hiroaki Muto, economist at Tokai Tokyo Research Center.
“High levels of inventories are flashing signs that we have entered a correction phase. Manufacturing in other economies is starting to weaken. We shouldn’t take this lightly.”Inventories of electronic parts, such as semiconductors and flat panel displays, surged 12.8 percent in March, versus a 1.7 percent increase in the previous month.
Retail sales rose 1.0 percent in March from a year earlier, less than a median market forecast for a 1.7 percent annual increase.The jobless rate held steady at 2.5 percent in March, near the lowest in 24 years.
The output, jobs and retail sales data comes before the Bank of Japan’s monetary policy meeting ends later on Friday. It is expected to keep policy on hold but could soon split over how to deal with sluggish inflation.