Japanese industrial production increased 2.5% MoM and 0.3% YoY in the preliminary February estimate, beating expectations of a 2.3% MoM increase. Despite the strong monthly increase, the annual rate slowed to nearly no growth.

• The industries contributing to production growth: Production machinery, electronic parts and devices, and chemicals.
• Weighing on production growth was the transport equipment (ex autos) industry
• Shipments were also up strongly, growing 3.0% MoM and 1.5% YoY.
• With shipment growth outpacing production, inventories fell -1.7% MoM and -1.4% YoY.
• The inventory ratio fell -3.5% MoM and was up 0.4% YoY.
• The survey sees production growing slightly in both March (+0.6% MoM) and April (+0.1% MoM).