Forex News – Japan industrial production beat expectations

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Japan’s industrial output jumped 4 percent in December beating expectations of a 2.9 percent gain, and up from November’s 2.7 percent drop.

Much of the driver behind growth was the pick up in demand for cars, mobile phones and semiconductor manufacturing equipment, according the Japanese Ministry of Economy.

Manufacturers expect the gains to continue, helped by recovery in Thailand, which is recovering from devastating floods recently. Thailand is a manufacturing hub for many Japanese businesses.

Despite the positive data, the Ministry of Japan said production as a whole remains “flat”. The Ministry also said the European debt crisis will weigh on sentiment and slow economic recovery there will affect demand for Japanese exports.

“Concerns over the European situation and the higher yen remain,” said an official at the trade ministry.

A separate report on unemployment in Japan also released today showed that the jobless rate ticked up slightly to 4.6 percent in December from 4.5 percent in November. Housing starts also declined sharply by 7.3 percent in December from a year earlier, coming in worse than the 1.5 expected drop.

December household spending was better than expected, however, rising 0.5 percent from the same time last year, compared with an expected 0.2 percent decrease.

Oil prices rose on the data on speculation that demand from Japan will increase as industrial production grows. Japan is the third-largest crude consumer.