Japanese factory output rose for the first time in six months in November and manufacturers expect to boost production in coming months, suggesting that firm demand in Asia will help the economy resume a recovery early next year.
Automakers also increased output to restock in anticipation of a pickup in domestic demand next year, a sign that output may have bottomed out after tumbling when government subsidies on low-emission cars expired in September.
The data bodes well for the fragile economy and underscores the Bank of Japan's forecast view that growth will pick up modestly early next year on continued support from exports to emerging Asia.
"The headline figure was in line with expectations, but forecasts for December and January came in quite strong," said Yoshiki Shinke, senior economist at Dai-ichi Life Research Institute.
"Since today's data shows that the downward risks to the economy have eased, we now have a smaller chance of the BOJ easing its policy further as long as there are no wild market fluctuations caused by some overseas factors."
Industrial output rose 1.0 percent in November, matching a median market forecast and marking the first rise in six months, the Ministry of Economy, Trade and Industry said on Tuesday.
Manufacturers surveyed by the ministry expect output to rise 3.4 percent in December and 3.7 percent in January.
Asian Recovery
Companies increased output of automobile, machinery and electronic parts mainly for export to Asia and the Middle East, the data showed.
"We have already got some positive news from Asian neighbours for October and November. This is confirmation that Japan is benefiting from the recovery of the Asian economies," said Masamichi Adachi, senior economist at JPMorgan Securities Japan.
Still, the ministry maintained its assessment that industrial output was moving on a weak note, stressing that production has recovered only moderately after steep declines in the past few months.
Underscoring the fragile state of the economy, household spending fell 0.4 percent in November from a year earlier and the jobless rate was steady at 5.1 percent.
Core consumer prices marked their 21st straight month of annual declines, a sign the country remains mired in deflation due to weak domestic demand and keeping pressure on the BOJ to maintain its ultra-easy monetary policy.
Japan's economy is expected to contract slightly in the final quarter of this year. Analysts expect growth to pick up early next year but only modestly due to weak consumer spending.
The BOJ eased policy in October by pledging to keep interest rates effectively at zero until the end of deflation was in sight and by crafting a 5 trillion yen ($60 billion) pool of funds to buy assets ranging from government bonds to corporate debt, including trust funds investing in stocks and property.
BOJ policymakers have repeatedly said that increasing the size of the fund would be a clear option if the looming economic slowdown proves worse than expected.
No comments:
Post a Comment