The smaller-than-expected increase in industrial production in January is a reminder of the fragility of the recovery in Japan, and perhaps in global activity too. The output projections made by firms for the following two months and the further pick-up in the manufacturing PMI for February (also released today) at least suggest that the sector will return to growth in the first quarter. As it happens, the fall in the yen is probably only playing a small part in the recovery. Nonetheless, the latest data will do little to ease pressure on the new Bank of Japan Governor to provide more monetary stimulus.
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