Japanese industrial production fell less than expected in February, but the second monthly decline in a row did little to disperse clouds building over the economy.
The widely watched indicator, seen as key to Japan's growth outlook, did not alter market views that the Bank of Japan may be forced to cut interest rates this year.
Another survey, covering purchasing managers in March, also showed manufacturing activity in Japan contracted.
A 10 percent rise by the yen against the U.S. dollar this year has raised concerns Japan's big export industries may suffer, but a government official said manufacturers had not reported a major impact on production yet from the yen's jump to 13-year highs.
"Looking ahead, it is difficult to say whether output is just going through a soft patch or in a downward trend when there is also a possibility that export growth could lose steam," said Takeshi Minami, chief economist at Norinchukin Research Institute. Industrial output fell 1.2 percent in February, the economy ministry said, compared with a consensus market forecast for a 2.1 percent drop, as production was firmer than expected among makers of machines and chemical products.