Tuesday, 28 December 2010

Japanese industrial production resumes recovery

The recent spate of negative data from Japan may have come to an end, based on data released today.

The Ministry of Economy, Trade and Industry reported today that industrial production rose 1.0 percent in November. This was the first increase in six months.

The rebound in industrial production is likely to be sustained in coming months. According to the findings of a ministry survey accompanying the industrial production report, manufacturers said they plan to increase output by 3.4 percent in December and 3.7 percent in January.

The industrial production data corroborates the recovery suggested by trade data last week. Last Wednesday, the Ministry of Finance had released data showing that exports grew 9.1 percent in November from a year earlier, accelerating from 7.8 percent the month before and ending a run of eight consecutive months of decelerating export growth.

Reports released in Japan today by the Statistics Bureau were not as positive though.

The Statistics Bureau reported that consumer prices in Japan rose 0.1 percent in November from a year ago. This was the second consecutive month that the inflation rate has been positive.

Excluding fresh food, however, prices were down 0.5 percent from a year ago, maintaining the negative trend. Excluding both food and energy, prices were down 0.9 percent.

Meanwhile, consumer spending remains depressed, with household spending falling 0.4 percent in real terms in November from a year ago, the same rate as in October.

Household income, though, rose 0.5 percent in real terms, the fourth consecutive year-on-year rise, and the unemployment rate held steady at 5.1 percent in November.

So on the whole, the latest economic data from Japan indicate that the economic recovery may still be intact.

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