Japan factory output up, firms expect recovery
Japan's December factory output rose at the fastest pace in a year and a half and firms expect further gains, raising hopes that stabilising global demand and exports will help pull the economy from its slump.
The data should encourage Prime Minister Shinzo Abe's government, which is gambling that its "Abenomics" policy of big fiscal spending and open-ended monetary easing by the Bank of Japan can energise the economy after decades of stop-start growth and intermittent deflation.
The 2.5 percent rise in production was below the median market forecast for a 4.5 percent gain and followed a 1.4 percent decline in November, data from the Ministry of Economy, Trade and Industry showed on Thursday.
"The results are not that bad and the forecasts show that production could continue to grow at a good pace," said Shuji Tonouchi, senior fixed income strategist at Mitsubishi UFJ Morgan Stanley Securities.
"We can say that production is bottoming out. Overseas economies are not likely to deteriorate any further, so this will support Japanese production and the overall economy."
The ministry raised its assessment of industrial output for the first time since January last year, saying it is showing signs of halting its declines. Previously, it had said production was on a downward trend.
"Positive effects from a weak yen and the government's economic measure are expected to appear," a trade ministry official said.
Manufacturers surveyed by the ministry raised their forecast for January to a 2.6 percent rise from an earlier forecast for a 2.4 percent gain. Firms expect production to
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