Japan raises sales tax as industrial production falls

Japan sees its first rise in sales tax in 17 years on Tuesday as the levy is raised from 5.0 percent to 8.0 percent. While the move is seen as necessary to curb its government debt, there is a risk that it may deter spending and dampen economic growth.

Data on Monday had already shown that Japan's recovery remains fragile. Industrial production fell 2.3 percent in February and the Markit/JMMA manufacturing PMI fell to 53.9 in March from 55.5 in February.

Elsewhere on Monday, the Institute for Supply Management-Chicago also reported that its business barometer fell to 55.9 in March from 59.8 in February.

In the UK, a report on Monday showed that mortgage approvals fell to 70,309 in February, the lowest since October last year, from 76,753 in January, which was the highest in more than six years.

However, another report on Monday showed that German retail sales jumped 1.3 percent in February.

Still, the fragility of the eurozone economy as a whole was underlined by another report on Monday that showed that its inflation rate fell to 0.5 percent in March, the lowest since November 2009, from 0.7 percent in February.