TOKYO: Japan’s factory output unexpectedly rebounded in September, data showed Thursday, tempering expectations the central bank would unleash more stimulus after a string of weak data from the world’s number three economy.
Government figures showed industrial production expanded 1.0 percent, after two consecutive monthly falls, thanks to brisk production of electronics devices and chemical products.
The reading beat market forecasts for a 0.5 percent decline and marks a sharp bounce from the previous month, while the economy ministry also lifted its assessment on factory output.
The surprisingly positive data dampened predictions the Bank of Japan (BoJ) would announce an expansion of its huge easing program after a meeting Friday.
Japan publishes inflation and unemployment figures Friday morning, which could also be key to the BoJ’s decision on whether to unleash more stimulus in the face of slowing global growth.
“Today’s data have reduced the chances that the Bank of Japan will announce more stimulus tomorrow,” research house Capital Economics said in a commentary.
“However, any signs in tomorrow’s inflation and unemployment data that the earlier slowdown in activity has reduced price pressures may still convince policymakers to step up the pace of easing.”
Yusuke Shimoda, economist at Japan Research Institute, cautioned that the latest figures were not enough to point to a recovery in the Japanese economy, which has been teetering on the edge of recession.
“We have to look at these figures cautiously. Concerns over the slowdown in the Chinese economy are still growing . . . Considering the environment surrounding Japanese companies, we cannot be optimistic about the prospects for the economy.”
Japan has suffered as exports to key trading partner China slumped, with weak inflation and consumer spending at home also slamming the brakes on growth.
The economy contracted in the second quarter and it is on track for another decline in the three months to September.
The central bank’s 80 trillion yen ($665 billion) annual asset-buying scheme—similar to the Federal Reserve’s quantitative easing scheme to pump money into the economy—is a key pillar of Prime Minister Shinzo Abe’s growth blitz, dubbed “Abenomics.”