JAPAN’S factory output in February fell the most since 2011 when a devastating earthquake ruptured the supply chain, stoking fears of another recession and renewing pressure on policymakers to take evasive action.

    Trade ministry data yesterday showed industrial output fell 6.2 percent month on month in February, largely in line with economists’ median estimate. It followed a 3.7 percent rise a month ago, which was the first gain in three months.

    It was the biggest drop since March 2011, when the devastating earthquake and tsunami struck Japan’s northeastern coastal areas.

    The decline was exaggerated by one-off factors caused by the Lunar New Year holidays in China and Asia generally, Japan’s key export markets, and Toyota Motor Corp.’s halting of factory production for a week following an explosion at a steel plant.

    Excluding such factors, analysts see factory output remaining flat as a trend due to weakness in external and domestic demand, dragged by sluggish sales of smartphones and tame capital expenditure at home, in China and in Asia generally.

    “Industrial output probably declined in the first quarter. I expect the economy to have barely grown with the extra Leap Year day pushing up consumption in February,” said Toru Suehiro, senior market economist at Mizuho Securities.

    “Stripping out the Leap Year effect, however, the economy has effectively shrunk in the first quarter, and the momentum is weak.”

    Manufacturers surveyed by the Ministry of Economy, Trade and Industry expect output to rise 3.9 percent in March and 5.3 percent in April.

    The ministry stuck to its assessment of industrial output, saying it is “seesawing.”

    The data come as Prime Minister Shinzo Abe seeks to adopt fresh extra stimulus spending after passage of the fiscal 2016 budget Tuesday, while speculation is rife that he may again delay a sales tax increase planned for April 2017.

    With inflation stalling, consumer spending weakening and China’s slowdown threatening to undermine export-reliant Japan, the central bank is under pressure to act again after it stunned investors less than two months ago by adopting negative rates.

    Analysts expect Japan’s economy to return to moderate growth in the January-March period but some warn of the risk of a second straight quarter of contraction, the definition of a technical recession, due to weak exports and tepid consumption. (SD-Agencies)