Despite this report, Japan still struggles.
I will continue my short of the yen but worried about timing.
nytimes.com;
Japanese Output Rises by 1.6 Percent
By HIROKO TABUCHI
TOKYO —Industrial production rose in March for the first time in six months and is poised to continue growing , the government said Thursday, a possible sign that the worst may be over for Japanese manufacturers.
The central bank left its benchmark interest rate steady at 0.1 percent, and held off further moves to boost corporate financing, as it gauged the early signs of an economic recovery. It said, however, that it still expects Japan’s economy to shrink 3.1 percent this year, more than the 2 percent contraction it predicted in January.
Japan is in the worst recession since World War II, hurt by a collapse in overseas demand for its cars and electronics. Flagship exporters like Toyota have responded with sharp production cuts and layoffs in recent months.
Now, factories are finally starting to replenish their inventories. Industrial output rose a better-than-expected 1.6 percent, after a record 10.2 percent plunge in January, and a 9.4 percent fall in February.
The rebound was led by a jump in electronic parts and machinery shipments, the Ministry of Economy, Trade and Industry said. Factory output is projected to jump 4.3 percent this month, and another 6.1 percent in May.
“There is a big possibility that production has finally escaped from the free-fall it has seen since the fall,” said Hirotaka Kusaba, a senior economist at the Mizuho Research Institute.
“But a V-shaped recovery is unlikely,” he warned, because underlying demand remains weak. “After a rebound, industrial production is likely to go through a period of ups and downs.”
Stocks surged on the industrial numbers, with the benchmark Nikkei 225 index rising 3.9 percent.
The Bank of Japan’s board voted unanimously to keep its overnight call rate at 0.1 percent, and held off from further stimulus measures. Since last year, the bank has announced plans to buy commercial paper, corporate bonds and stocks from financial institutions to shore up their balance sheets and spur lending.
Still, in a report published Thursday, the bank downgraded its economic forecast for the year. It now Japan’s gross domestic product to shrink 3.1 percent, worse than the 2 percent fall it saw in its previous assessment in January.
”Economic conditions are likely to continue deteriorating in the coming months, but gradually level out thereafter,” the report said. It said a moderate recovery could come in the second half of the fiscal year, or October through March. The Japanese government hopes a record 15 trillion yen, or $155 billion)in stimulus spending, equivalent to about 3 percent of Japan’s gross domestic product, will hasten a recovery. Prime Minister Taro Aso submitted the plan to Parliament on Monday.
Other recent economic data show a brightening picture. Exports in March rose 2 percent from the previous month, the first increase in nearly a year. |
