Industrial Output In Japan Rises Less Than Expected

“Japan’s industrial production rose less than economists forecast, suggesting that a recovery in the nation’s manufacturing sector is lagging a weakening yen.

Output rose 2.5 percent from November, when it declined 1.4 percent, the Trade Ministry said in Tokyo today. The median estimate of 25 economists was for a 4.1 percent gain. Production fell 7.8 percent from the previous year.

The outlook for the economy may improve this year as the depreciating yen and Prime Minister Shinzo Abe’s fiscal stimulus measures help to support corporate profits and stoke growth. Goldman Sachs Group Inc. last week raised its growth forecast for the year starting in April to 2 percent from 1.2 percent.

“We don’t need to be too pessimistic about the outlook,” said Naoki Iizuka, an economist at Citigroup Inc. in Tokyo. “Production will probably return to a clear recovery track in the coming months.”

The yen has depreciated more than 12 percent against the dollar in the past three months, the most among 16 major currencies tracked by Bloomberg. It was 0.2 percent higher at 90.94 per dollar as of 11:23 a.m. in Tokyo. The Nikkei 225 Stock Average (NKY) was down 0.6 percent at the lunch break today after gaining for the last 11 weeks.

While the data showed that production of transport equipment rose 6.9 percent on a seasonally adjusted basis, Japan’s three largest automakers — Toyota Motor Corp. (7203), Honda Motor Co. and Nissan Motor Co. — reported falling domestic production in December from the previous month….”

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