Japan’s Ministry of Economy, Trade and Industry released a preliminary report today showing that industrial production increased by 0.3% in March compared to the previous month.
Industrial production rose for the second month in a row in March, following a 2.0% increase in February, and industrial production is expected to show signs of recovery.
Japan’s factory and mining production index was 96.5 points, down from 100 points in 2015, while the industrial transportation index rose 0.5% to 93.2 points and the sector’s inventory index rose 0.5% to 93.2 points. The industry fell 0.6% to 100.7 points.
The Japanese economy is facing many challenges. In particular, the collapse of the yen. Ranil Salgado, head of the Japan Department at the International Monetary Fund (IMF), warned that “the sharp decline in the yen could hamper the Japanese economy’s recovery from the coronavirus pandemic. This is because the yen’s depreciation makes imports more expensive and affects consumer spending.”
The yen has weakened by almost 15 yen against the dollar since March. Normally, a weaker yen makes conversion more profitable for Japanese exporters. But now the yen’s decline is affecting the Japanese economy. As a result, prices for imported energy and other commodities have skyrocketed.