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Japan's March industrial output falls 0.9% on month

This photo taken on May 28, 2018, shows a production line operated by Mazda Motor Corp. at its plant in Hofu, Yamaguchi Prefecture, western Japan. (Kyodo)

TOKYO (Kyodo) -- Japan's industrial output in March fell 0.9 percent from the previous month amid slowing demand for exports of automobiles and manufacturing equipment, government data showed Friday.

The seasonally adjusted index of production at factories and mines stood at 101.9 against the 2015 base of 100, the lowest level since January 2018, the Ministry of Economy, Trade and Industry said in a preliminary report.

The result, which followed a revised 0.7 percent rise in February, prompted the ministry to downgrade its assessment of production from "pausing" to being "in a weak tone recently."

Production of passenger cars and auto parts fell as exports to North America slowed, while that of equipment used to manufacture semiconductors and flat-panel displays also declined amid falling demand from China and other parts of Asia, a ministry official said.

The weak data underscored the view that the Japanese economy's modest recovery may be drawing to a close amid a global slowdown triggered in part by a trade war between the United States and China.

According to a key measure of economic trends, the world's third largest economy may have already entered a recessionary phase late last year.

"Exports and production, which are the drivers of the domestic economy, have been weakening for the past year and are showing no signs of improving any time soon," said Takeshi Minami, chief economist at the Norinchukin Research Institute.

Minami also warned that the Golden Week holiday from Saturday, this year extended to 10 days to celebrate the crowning of a new emperor, will hurt production.

"Spending on leisure activities will get a boost during the holiday, but a subsequent downswing could put further pressure on output," he said.

Manufacturers polled by the ministry said they expect output to gain 2.7 percent in April and then rise 3.6 percent in May.

The index of industrial shipments declined 0.6 percent to 101.6 while that of inventories was up 1.6 percent at 104.0.

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