TSX runs higher on rate cut expectations
Investing.com-- Japanese industrial production shrank much more than expected in March, as manufacturers scaled back output amid heightened economic and trade uncertainty, while retail sales grew less than expected.
Industrial production fell 1.1% month-on-month, much more than expectations for a 0.5% drop, government data showed on Wednesday.
The print comes as Japan’s major manufacturers grapple with the prospect of increased U.S. trade tariffs on the country. President Donald Trump unveiled a 24% tariff on Japan earlier in April, although he did pause the measure until July.
But Trump’s 10% universal tariff remained in place, as did a 25% duty on automobiles, which are a major Japanese export to the United States.
Trump’s tariffs will be borne by U.S. importers, and are expected to severely weigh on export demand in the country. Such a trend bodes poorly for Japanese manufacturers, and drove cuts in output as producers prepared for the tariffs.
Japanese retail sales also underwhelmed, following a strong run through most of 2024. Retail sales grew 3.1% year-on-year in March, less than forecasts of 3.6%.
But the figure picked up sharply from the 1.3% growth seen in February. Retail sales are also expected to pick up further in the coming months, especially following another round of bumper springtime wage hikes.