TOKYO (Reuters) -Japan's January factory output fell at the fastest pace since May 2020, government data showed on Thursday, as a production downturn in motor vehicles adds to concerns about the fragility of an economy that slipped into recession late last year.
Industrial output fell 7.5% in January from the previous month, data from the Ministry of Economy, Trade and Industry (METI) showed. It was slightly worse than the median market forecast for a 7.3% drop, with output sliding in 14 of the 15 industries surveyed by METI.
The ministry also downgraded its assessment of industrial output for the first time since July last year, laying bare the challenges for the economy as it tries to recover from a recession at the end of last year.
Production declined the most in motor vehicles, down 17.8% in January from the previous month. Output decreases in regular passenger cars and electrical drives systems pulled down the overall figures.
Japanese automaker Toyota Motor in January suspended shipments of some models after finding irregularities in certification tests for diesel engines developed by affiliate Toyota Industries.
Toyota's small-car unit Daihatsu also continued to suspend production at its domestic plants through January due to misconduct related to rigged collision-safety tests.
Manufacturers surveyed by the Ministry of Economy, Trade and Industry expect seasonally adjusted output to increase 4.8% in February and rise 2.0% in March.
However, the forecast production gains for February and March are not large enough to offset January's drop, a METI official said.
Separate data showed Japanese retail sales rose 2.3% in January from a year earlier, government data showed, marking a 23rd straight month of increase.
It matched the median market forecast for a 2.3% rise.
(Reporting by Satoshi Sugiyama; Editing by Chang-Ran Kim and Jacqueline Wong and Shri Navaratnam)
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