Econintersect: Industrial production (IP) in Japan rose by 2.7% (month-over-month) in September, reversing a 1.9% decline in August and significantly better than an expected gain of 2.2%. This is the strongest month since January and was sorely needed to stem a manufacturing slowdown underway in 2014. After the strong September number, IP is now down 2% for the year and down 4.3% since the consumption tax hike o1 April. Fourth quarter data will be needed to determine if Premiere Shinzo Abe’s economic programs are getting back to a positive direction.
However, this is the second day of upbeat economic data for Japan. Yesterday retail sales numbers came in better than had been expected.
Interpretation of IP data is not very reliable on a single month’s results due to the extreme volatility of the month-to-month numbers.
Japan Industrial production MoM (Trading Economics, 29 October 2014)
Japan factory output jumps, but Abe needs more to cement tax plan (Tetshushi Kajimoto, Reuters, 29 Ocotber 2014)
Japan: Surprise Jump in Retail Sales (GEI News, 28 October 2014)