Japan Factory Output Surges in December on Strong ExportsBy and
Better-than-expected data points to another quarter of growth
Output reaches highest level since global financial crisis
Industrial production in Japan accelerated in December, pushing output to the highest level since the global financial crisis. The third straight month of rising factory output points to solid economic growth in the fourth quarter.
Strong global demand has driven a year-long recovery in exports, prompting Japanese manufacturers to steadily raise production throughout 2017. Yet increasing domestic consumption remains key to Japan’s economic recovery becoming self-sustaining. A raft of data released on Tuesday showed that consumers remain cautious about spending in the absence of bigger pay increases.
- "The numbers look good, which is my simple impression," said Hiroshi Hanada, head of economic research at Sumitomo Mitsui Trust Bank, adding that the Japanese economy likely expanded again in the fourth quarter. "Production is rising firmly on a quarterly basis, too.”
- While output may fall in January, it is forecast to rebound in February, Hanada noted. "I don’t think the upward momentum for production will be lost."
- “It’s debatable whether domestic demand is strong, but the consensus is that exports will continue to rise,” said Yasutoshi Nagai, chief economist at Daiwa Securities Co. "So production will remain strong and keep going up."”
- The January forecast is a bit concerning, but it’s unlikely to change the general trend, Nagai said.
— With assistance by Yoshiaki Nohara