Japan factory output up on stronger demand


AFP

TOKYO–Japan’s factories boosted output in September, data showed Wednesday, reversing a slide in the previous month owing to stronger domestic demand and highlighting that the world’s third-largest economy is gathering steam. Industrial production rose 1.5 percent month-on-month, compared with a revised fall of 0.9 percent in August as demand among Japanese consumers for electronics and cars rose ahead of a sales tax hike next year. Over the three months to September, the nation’s plants expanded production by 1.8 percent. The data are a key yardstick for the success of Prime Minister Shinzo Abe’s policy blitz, dubbed “Abenomics,” aimed at stoking growth in Japan’s long-lumbering economy. Takeshi Minami, economist at Norinchukin Research Institute in Tokyo, said the data pointed to a recovery that is “continuing steadily,” propped up by improving demand at home, while Japan’s export picture remains tepid with unsteady demand overseas. However, a sharply weaker yen has boosted profitability at Japanese exporters. Bank of Japan (BoJ) policymakers will be poring over the latest data with markets keen to see if the central bank would expand an aggressive monetary easing program, unveiled in April, as they watch for signs its U.S. counterpart was ready to start winding down its own stimulus drive. “We currently don’t see a need for further monetary easing (by the BoJ),” Anoop Singh, director of the International Monetary Fund’s Asia and Pacific Department, told reporters in Tokyo.

“Rather, the priority now is to advance growth reforms. For Abenomics to work, Japan’s long-term economic problems need to be tackled.” The fresh Japanese production figures come after separate data Tuesday showed that the country’s thrifty households boosted their spending last month while the unemployment rate fell.

The 3.7 percent on-year jump in spending — the best result in six months — far outstripped economists’ expectations.