We predict Japan’s industrial production index (IP) dipped 1.1% m/m to 94.9 in February as Asia celebrated the Lunar New Year and demand hit a lull. Iron and steel production fell 7.9% m/m, though copper wire and cable shipments rose 5.4%. Semiconductor manufacturing equipment billings dropped 2.9% m/m. We expect to see that automobile production slowed as auto sales plunged 33% m/m in China due to surging gasoline prices and the expiration of government subsidies.
Though IP moderation normally subsides in March, we believe the IP index slid precipitously due to production halts[...]