MNI BRIEF: Japan Dec Factor Output Hits 1st Rise in 2 Months
MNI (TOKYO) - Japan's industrial output rose 0.3% m/m in December for the first rise in two months following -2.2% in November, thanks to higher production machinery and electronic parts and devices, although production of automobiles fell, data released by the Ministry of Economy, Trade and Industry showed on Friday.
Production of automobiles fell 1.7% m/m in December for the second straight drop following -4.3% in November, showing that demand for automobiles is slowing overseas.
Production machinery rose 2.9% in December for the first rise in two months following -9.1% and production of electronic parts and devices rose 2.1% vs. -2.2% in November.
Industrial output is a key piece of data for BOJ economists to assess and predict the pace of the current modest economic recovery as it reflects both external and domestic demand.
Based on its survey of manufacturers, METI projected that industrial production would rise 1.0% in January (revised down from +1.3% forecast last month) before further rising 1.2% in February. Adjusting the upward bias in output plans, METI forecast production would fall 2.1% on month in January.
Based on this assumption and if March output is flat, production would fall 2.0% in January-March, the first drop in two quarters following +1.3% in Q4.
BOJ officials are paying attention to developments in the U.S. economy and its impact on production and exports as a leading driver of Japanese exports and production.