Japan's recovery "stalled' as September IP sinks: BBVA

Biggest monthly decline since 2011 earthquake.

Japan has released official data showing that industrial production for September suffered a sharper-than-expected decline of -4.1% m/m sa (consensus: -3.1% m/m), the biggest monthly decline since last year’s earthquake, when IP fell by -16.2%.

"The industrial production data, together with worse-than-expected September exports and inflation released earlier this month, reaffirm that Japan’s economic recovery has stalled due to a combination of the global downturn, the strong yen, and the recent territorial dispute with China – Japan’s biggest export market. Looking ahead, we expect Japan’s economy to contract in the second half year. Our current growth forecasts for Japan are 2.2% and 1.2%, respectively in 2012 and 2013," said BBVA.