Japan factory output falls

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JapanBrokerage REUTERS A man looks at his watch as he passes an electronic board displaying a graph of currency rates outside a brokerage in Tokyo.

Tokyo - Japan's industrial output in February fell 2.3 percent month-on-month, slipping after a 3.8 percent expansion in January, government data showed Monday.

Economists had widely predicted a 0.3 percent rise, and the February contraction was the first decrease in output in three months.

The surprisingly weak production figures follow mixed economic data for Japan and come just a day before the country's first sales tax hike since the late 1990s.

There are fears that increasing the levy on everyday goods to 8.0 percent from 5.0 percent - seen as crucial to paying down Japan's huge national debt - could weigh on consumer spending and derail a recovery in the world's third-largest economy.

Last week figures showed Tokyo's bid to stoke lasting inflation in a country plagued by years of falling prices was gathering steam, while unemployment fell to a more than six-year low. - Sapa-AFP

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