Japan¡¯s factory output fell in March as the war in Iran clouded prospects for global demand while also threatening manufacturers¡¯ margins by way of higher energy costs.

Industrial production dropped 0.5% from February, the industry ministry reported Thursday. Economists had expected a 1.1% increase. Output gained 2.3% from a year earlier, compared with expectations of a 2.2% gain.

Thursday¡¯s report reflects a period in flux, with business prospects for manufacturers starting to dim as the impact of the Middle East conflict rippled through the global economy.?