Tokyo, April 30 (IANS) Japan’s industrial output in March edged down 0.5 per cent from the previous month on a crude oil price surge and supply chain disruptions stemming from the Middle East conflict, which weighed on the output of chemical and petroleum products, government data showed Thursday.
The seasonally adjusted index of production at factories and mines stood at 101.9 against the 2020 base of 100, the Ministry of Economy, Trade and Industry said in the preliminary report.
The decrease followed a 2 per cent decline in February. Eight of the 15 sectors surveyed reported a drop in output.
In fiscal 2025, industrial output slipped 0.2 per cent from the previous year to 101.2, marking the fourth consecutive year of decline.
Based on a survey of manufacturers, the ministry expects output to climb 2.1 per cent in April and 2.2 per cent in May, Xinhua news agency reported.
The Bank of Japan (BOJ) decided by a majority vote to keep its benchmark interest rate unchanged at around 0.75 per cent after concluding its two-day monetary policy meeting on Tuesday.
The widely expected decision came amid persistent uncertainty over the Middle East conflict, which has pushed up crude oil prices and disrupted trade, threatening to weigh on Japan’s corporate profits and households’ real income.
Meanwhile, in its latest quarterly outlook report released after the policy meeting, the central bank cut its forecast for Japan’s economic growth for fiscal 2026 to 0.5 per cent, down from an earlier projection of 1 per cent.
The bank also revised its inflation forecast for the current fiscal year starting in April up to 2.8 per cent from the 1.9 per cent projected in January, reflecting higher prices for crude oil and a wide range of other goods stemming from the Middle East conflict.
Despite the latest decision, the BOJ vowed to push ahead with interest rate increases, saying it would carefully weigh the timing and pace of monetary adjustments while “closely monitoring” the future course of the Middle East conflict and its impact on Japan’s economic activity and prices.
Maintaining market expectations for another rate hike is important to curb further yen weakness against the US dollar, which could fan inflation in resource-scarce Japan through higher import costs.
The BOJ said it will remain vigilant to prevent inflation from significantly “deviating upward” and adversely affecting the economy.
The central bank maintained the benchmark interest rate steady for the third consecutive meeting after raising it to the highest level in 30 years in December 2025.
–IANS
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