Japan Nov Industrial output surges 1.5%

Bloomberg

Japan’s industrial output rose the most in five months in November as export volumes rebounded sharply, pointing to an expected economic expansion in the fourth quarter.
Industrial production increased 1.5 percent in November from a month earlier (forecast +1.7 percent). Output is forecast to rise 2 percent in December and 2.2 percent in January. Retail sales rose 1.7 percent in November from a year ago, the first gain since February (forecast +0.8 percent).
Rising production bodes well for Japan’s economy, and unexpected strength in exports last month point to output gaining traction.
Export volumes rose by 7.4 percent in November from a year earlier, with those to China jumping 16 percent. The yen’s slide following Donald Trump’s election victory is expected to fuel further export gains.
Overseas demand, including from developing nations, is recovering and production is growing to meet their consumption needs,” said Takeshi Minami, chief economist at Norinchukin Research Institute. “Inventories are down and shipments are up, lifting production,” Minami said.
“Production is getting a lift as the overall economy gets somewhat better,” said Junko Nishioka, chief economist for Japan at Sumitomo Mitsui Banking Corp. in Tokyo. Caution is warranted on consumer spending, despite the upbeat retail sales data, said Nishioka, who pointed to a decline in household spending last month. “The labor market continues to be tight and improving conditions point to higher wages, but that’s not smoothly translating into higher spending.”
Industrial output rose 4.6 percent from a year earlier (forecast +4.7 percent). Retail sales rose 0.2 percent from a month ago (forecast -0.5 percent).