Japan’s industrial production falls as US tariff uncertainty weighs

Industrial production in Japan declined 1.1% in March, surpassing economists’ forecasts of a 0.4% drop, Bloomberg reported. The slump, driven by weaker output in the auto and electronics sectors, reflects growing economic headwinds from US tariff measures, even as transportation equipment (excluding autos) posted gains.

The downturn follows the US imposition of 25% tariffs on steel and aluminum in March, with additional auto duties and a blanket 10% levy on general goods taking effect in April. Bloomberg analysts warn these measures could slash Japan’s exports by up to 10% if trade tensions escalate further.

Additionally, Bloomberg reports that retail sales in Japan increased by 3.1% in March, marking the 37th consecutive month of growth. However, economists caution that concerns about the country’s economic prospects remain.

Meanwhile, the Bank of Japan is expected to continue its current monetary policy amid ongoing uncertainty.