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Japan's industrial output tumbled in February

Japan's industrial output tumbled 2.3 percent in February from a month earlier, falling for the first time in three months and well short of analyst forecasts in a Reuters poll for a 0.3 percent increase.

The data could stoke concerns about the outlook for Japan's economy before a sales tax hike kicks in on April 1.

There are concerns that the rise in Japan's consumption tax, set to rise to 8 percent from 5 percent, could harm a recovery in the world's third biggest economy.

(Read more: Japan braces for first sales tax hike in 17 years)

The unexpected fall in February output followed a 3.8 percent increase in January, Japan's Ministry of Economy, Trade and Industry (METI) said.

"This [fall] is one month of data and realistically it is better to look at annualized data, said Jim McCafferty, head of research at CIMB Securities. "If you look at the Tankan survey in December, Japanese corporates are more optimistic about the outlook," he said, referring to a quarterly survey of Japanese business sentiment.

Japanese manufacturers surveyed by METI expect industrial output to rise 0.9 percent in March and decline 0.6 percent in April, Reuters reported.

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