Japan’s industrial output rose 2.4 percent in December, but less than the initial estimate of 2.5 percent, indicating that the world’s third-largest economy is continuing to weaken.
According to the data released Friday by the Ministry of Economy, Trade and Industry, Japan’s industrial production, which measures the total inflation-adjusted value of output from manufacturers, mines and utilities, rose 2.4 percent in December, from a 1.4 percent decline in November but below the analysts’ forecast of 2.5 percent.
The industrial output was down 7.9 percent compared to that in the same period a year ago. Growth in transport equipment and general machinery sectors helped the industrial output edge up.
The capacity utilization index gained 2.9 percent to 84.6 in December from that in November, when it was down 0.2 percent, the data showed.
Japan’s economy is struggling to shrug off a mild recession and deflation as the economic growth contracted 0.1 percent on quarter-on-quarter basis and by 0.4 percent annually in the fourth quarter ending Dec. 31, according to the official data released Wednesday.
This report comes after it was revealed earlier this month that Japan’s core machinery orders posted a better-than-expected rise in December compared with those in the earlier month, indicating that manufacturing production in the country is improving. Japan’s core machinery orders posted a better-than-expected rise in December compared with that in the previous month, indicating that manufacturing production in the country is improving.
The world’s third-largest economy is battling deflation, falling exports and an investment slump, forcing the newly elected Shinzo Abe government to resort to radical monetary measures to stimulate growth. The Abe government has increased public spending and adopted an export-friendly monetary policy to revive the economy.
Japan’s new monetary measures have triggered an international debate, and the issue is expected to see fierce debates at a meeting of the G20 finance ministers and central bankers in Moscow beginning Friday. Japanese policymakers are under pressure to convince the meeting that the new measures are intended to promote growth and are not designed to deliberately weaken the yen to benefit from currency depreciation.
While keeping the key interest rates untouched at its policy board meeting Thursday, the Bank of Japan (BoJ) upgraded the outlook for the Japanese economy and expressed optimism that the economy was in recovery path. In a statement, the bank said that the economy had bottomed out and would show gradual recovery in the coming months.
"Industrial production is projected to pick up gradually… Exports are expected to stop decreasing and start picking up as overseas economies gradually emerge from the deceleration phase," the BoJ said in its monthly economic report for February.