Japan's 2.5% industrial production growth disappoints analysts

It missed the 4.12% market forecast.

According to BBVA, Japan’s industrial production rose 2.5% m/m sa in December, missing the market forecast of 4.1% m/m (prior: -1.4% m/m). 

On an over-year basis IP fell by -7.8% (prior: -5.5%, consensus: -5.6%), suggesting that the manufacturing sector has remained sluggish despite the recent weakening in the yen.

"Deputy Governor of the Bank of Japan Hirohide Yamaguchi signaled today the central bank could take more action if warranted by economic and price conditions (the bank has already adopted a 2% inflation target). Today’s outturn adds further weight to our belief that Japan’s economy will contract in the fourth quarter of 2012 – but we expect growth to pick up next year on pro-growth policies by the government and the Bank of Japan," BBVA said.