Japan's February economic index decreased by 1.6 points

Investing.com – Government data released on Tuesday showed that the coincident indicator index measuring the state of Japan’s economy fell in February, revealing the country’s economic weakness before it faced the impact of the war with Iran.

The coincident indicator index for measuring current economic conditions declined by 1.6 points month over month to 116.3 in February, its first decline in two months.

This drop was mainly driven by lower shipments of semiconductor chips and chip-manufacturing equipment, as well as a reduction in automobile production. These figures raised doubts about the Bank of Japan’s assessment that strong global demand will support exports.

A recent private survey showed that the number of bankruptcy cases in the home painting board segment has increased. Small operators in the industry are already facing intense competition and a long-running labor shortage, and they have also been affected by rising fuel costs and supply constraints caused by the conflict.

Countries like Japan, which are almost completely dependent on imported Middle East oil and naphtha, are facing more and more challenges as expectations that the war will quickly end weaken.

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