Japan Jan. industrial output rises 2.2% m/m; est. 5.5%

Japan Jan. industrial output rises 2.2% m/m; est. 5.5%

Japan’s Industrial Output Surpasses Expectations in January 2026

Japan’s industrial production rose 2.2% month-over-month in January 2026, according to preliminary data, exceeding the median forecast of a 5.3% increase. This marked the first rebound in three months, reversing a 0.1% decline in December. The recovery was driven by front-loaded activity ahead of the Lunar New Year, which spurred a surge in output across key sectors.

On an annual basis, industrial production expanded 5.2% year-over-year, following a 2.6% rise in December. The rebound was supported by a 16.8% year-on-year increase in export values in January, attributed to rush shipments before the holiday season. However, December’s growth had been constrained by U.S. tariffs on automobiles and metals, which dampened export demand.

Key contributors to January’s growth included transport equipment, production machinery, and chemicals. The Ministry of Economy, Trade and Industry (METI) noted a cautiously optimistic outlook, maintaining its assessment that industrial output remains "taking one step forward and one step back". METI’s survey of production forecasts suggests continued momentum, with output expected to rise further in February and March.

Despite the January rebound, underlying challenges persist. December’s data revealed a 0.1% decline in production, reflecting the drag from U.S. trade policies. METI highlighted global economic uncertainties, particularly protectionist measures under the current U.S. administration, as ongoing risks.

Industrial production, a critical indicator for Japan’s export-dependent economy, remains sensitive to global demand and trade policy shifts. With the Lunar New Year effects fading, attention will turn to whether the January surge translates into sustained growth or if external pressures reemerge.

(https://www.cmegroup.com/education/events/econoday/646946): CME Group Economic Calendar, Ministry of Economy, Trade and Industry (METI) reports.
(https://macenews.com/preview-forecasters-see-sharp-rebound-for-japanese-industrial-production/): Mace News, Ministry of Finance trade statistics.