The factory output in Japan rose in January by 1% over the previous month, a smaller increase than expected, but a small sign of recovery, according to the government. The expectation was a 1.5% market expansion over the revised 2.4% increase experienced in December. The January increase is still down 5.1% from one year earlier.
The Japanese Ministry of Economy, Trade, and Industry published its report on Thursday, posing that the second consecutive month of increases suggested the slump in industrial production had “bottomed out,” and that things were picking up. The ministry credited the small monthly increase to the rising shipments of vehicles; iron, steel, and electronics equipment; and semiconductors and auto parts.
Similarly, the government raised its assessment of the economy as a whole, saying that corporate sentiment and consumer spending were improving due to the weakening yen and rising share prices. “The economy has bottomed out, but some weak areas remain,” said the Cabinet Office. But it is still expected that the country will move out of recession that began last year as the Bank of Japan takes steps to meet the expectation of a 2% inflation target. Prime Minister Shinzo Abe’s nomination for new BOJ governor is also expected to be named this week.