Japanese consumer prices rise, industrial production falls

The Japanese economy's weaknesses appear to be dissipating. Unfortunately, so are its strengths.

Bloomberg reports today that Japan stayed out of deflation in January.

Japan's consumer prices rose for a fourth month in January, matching the fastest pace in more than nine years, as companies passed on higher costs of oil, wheat and soybeans.

Core consumer prices climbed 0.8 percent from a year earlier, the same rate as December, the statistics bureau said today in Tokyo...

Tokyo's core prices, a harbinger of the nationwide index, climbed 0.4 percent in February from a year earlier, the same pace as January...

And consumer spending grew.

A separate report today showed household spending climbed 3.6 percent in January from a year earlier, as consumers bought new-model cars. Retail sales climbed 1.5 percent, in part because higher oil prices boosted revenue at gas stations, the government said yesterday.

Also, the job market did not deteriorate in January and housing starts fell at the slowest pace in seven months.

But manufacturing in Japan appears to be deteriorating. From Reuters:

The NTC Research/Nomura/JMMA Purchasing Managers Index, which gives an early snapshot of the health of manufacturing, declined to a seasonally adjusted 50.8 in February from 52.3 in January, a four-month low...

The PMI's new export orders index hit a three-year low of 49.5, down from 52.1 in January and falling below the 50 mark for the first time since December 2004...

The PMI's new orders index, a barometer of future demand that combines goods orders from both home and abroad, stayed above the 50 threshold for the fourth straight month in February, but showed a sharp drop to 50.4 from 53.5 from the previous month...

The output index, which approximates industrial production, also fell to the lowest level in four months to 50.9 from 52.3 from January, reflecting a slowdown in new orders...

The government said on Thursday that Japan's industrial production fell 2.0 percent in January from December, twice as much as expected, heightening concern that the country's economy may slow down or even contract in the first quarter of 2008.