MNI BRIEF: Japan Industrial Output Rises 1.8%, Outlook Weakens

Japan's industrial output rose 1.8% m/m in December for the first rise in two months following November's 0.9% fall, thanks to higher production of general-purpose and business oriented-machinery, and chemicals, data released by the Ministry of Economy, Trade and Industry showed on Wednesday.

Production of motor vehicles rose 1.2% m/m, the first rise in two months following November's 2.5% fall.

Based on its survey of manufacturers, METI projected industrial production would fall 6.2% in January (revised up from -7.2% forecast last month) before rising 2.2% in February. Adjusting the upward bias in output plans, METI predicted production would fall 10.5% m/m in January and rise 2.2% in February.

Based on this assumption, and if March output stays flat, production would fall 8.3% q/q over Q1, the first drop in two quarters following Q4's 1.4%. The METI left its assessment from the previous month, saying that industrial production is marking time.

The Bank of Japan noted developments in overseas economies has impacted industrial production, which has remained more or less flat.