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TOKYO – Japan's industrial production fell in March, but by less than forecast, casting doubt on expectations that the central bank will opt to expand its already lavish monetary stimulus.
The government said Thursday that industrial production fell 1.2 percent in March from a year earlier and 0.3 percent from the month before. Manufacturers and analysts had anticipated a drop of over 2 percent from February, when output fell 1.3 percent from the month before.
Japan's central bank is mulling whether to expand its monetary stimulus at a policy meeting Thursday. But the relatively mild decline in factory output could relieve some pressure for added measures.
"The decline in industrial production in March was much less pronounced than expected and suggests that GDP growth remained solid last quarter," economist Marcel Thieliant of Capital Economics said in commentary. As such, it would provide an excuse for the Bank of Japan to leave policy settings unchanged at its meeting Thursday, he said.
In March, inventories rose as output of electrical machinery, oil and petroleum products and metals fell. Factories turned out more autos than a month earlier, but production of vehicles fell from a year earlier.
Weak demand from China and the U.S. may be hindering Japan's efforts to boost growth.
Japan's economy fell into recession following an increase in the sales tax to 8 percent from 5 percent on April 1, 2014. The Bank of Japan expanded its asset purchases in October to help counter the malaise, but growth has remained flat despite a mild recovery in exports.