Release Explanation: This report is a preliminary leading indicator of an economy’s health. Industrial production measures the volume of items produced in Japan’s mining and manufacturing industries and tends to react quickly to the ups and downs in the business cycle. For these reasons industrial production is considered a reliable leading indicator that conveys information about the overall health of the Japanese economy.

Trade Desk Thoughts: Industrial production for February has risen slightly from the lows achieved in the previous month. Economists had been expecting a -9.1 percent decline when in fact the report was released slightly worse off, at -9.4 percent for the month of February. The index is still off by 38.7 percent from one year ago. The industries which contributed to the decline were transport equipment, general machinery, and electrical machinery. Meanwhile, production forecasts are expected to increase 2.9 percent in March and to 3.1 percent in April.

Forex Technical Reaction: The yen has not reacted in any significant capacity. The pair closed the slight gap that was seen at the open and has since settled into a channel along the 98.00 area which is just above the neutral pivot point.