Japan’s struggling manufacturers are showing signs of life: The government said yesterday that industrial production rose for the first time in six months in March.
What’s more, the outlook is encouraging. Factory output — pivotal in this export-oriented economy — was projected to have risen 4.3 percent last month and to rise another 6.1 percent this month.
Stocks surged on the report, with the benchmark Nikkei 225 index soaring nearly 4 percent.
After tumbling sharply in recent months, industrial output rose 1.6 percent from February — beating an average market forecast for a 0.9 percent uptick in a survey of economists by Kyodo news agency.
While meager, the monthly gain represents a marked turnaround from February’s 9.4 percent plunge and January’s record 10.2 percent drop, suggesting that a recovery has emerged for a key part of the world’s second-largest economy.
March’s increase was led mainly by electronic parts and general machinery, said the Ministry of Economy, Trade and Industry, which upgraded its assessment of industrial production to “sluggish” from “drops steeply.” Such tweaks suggest changes in official views on the economy.
Later yesterday, Japan’s central bank kept its benchmark interest rate steady amid signs that the country’s economic picture may be brightening.
The Bank of Japan’s (BOJ) eight-member policy board voted unanimously yesterday to leave the overnight call rate target unchanged at 0.1 percent, as widely expected.
Separately, the bank said in its semiannual economic outlook report that it expects Japan’s economy to shrink 3.1 percent this year, more than the 2 percent contraction projected in January.
“Economic conditions in Japan have deteriorated significantly,” the central bank said in its economic report. “The outlook for Japan’s economy from fiscal 2009 through fiscal 2010 is likely to greatly depend on developments in overseas economies and global financial markets.”
The BOJ said a steady recovery of the world economy is still uncertain and that projections need to take into account process of the US and European financial restructuring and the pace of recovery in the global demand.
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