October - Industrial Production up 2.4% - but outlook weak

Japan's government says industrial production rose 2.4 per cent in October from the previous month.
The reading marks the first climb in two months, though the Ministry of Economy, Trade and Industry expects it to dip again in November.

It describes industrial production as "flat."

Japanese manufacturers have been contending with multiple headwinds including a strong yen and a weak global economy that threaten exports.

The ministry's report on Wednesday said transport equipment, general machinery and chemicals drove October's expansion in factory output.

Shipments rose 0.6 per cent from September, and inventories climbed 0.8 per cent.

http://news.smh.com.au/breaking-news-business/japan-industrial-output-rises-in-october-20111130-1o61a.html

Japan's factory production rose for the first time in two months as auto and machinery makers expanded output while bracing for global headwinds.

Factory production in October rose 2.4 percent from the previous month, the government said Wednesday. In September, it slumped 3.3 percent.

Autos, general machinery and chemicals drove the latest increase, according to the Ministry of Economy, Trade and Industry's preliminary report.

It described industrial production as "flat" and expects another dip this month. It estimates a 0.1 percent decline in November and a 2.7 percent rise in December.

Masamichi Adachi, senior economist at JP Morgan Securities Japan, said the government's forecasts for the last two months of the year are "too optimistic" given rising inventories.

A strong yen and a weak global economy has been challenging for Japan's exporters. Along with the debt turmoil in Europe, the recent flooding in Thailand that has disrupted auto production has compounded worries.

A deputy governor of Japan's central bank underscored those concerns in a speech Wednesday in Kyoto, western Japan. Europe's sovereign debt problems represent the biggest concern for the global economy and could lead to lackluster growth around the world, Kiyohiko Nishimura said.

The yen has strengthened as a result, with global investors flocking to the Japanese currency as a safe haven. The yen has hit multiple historic highs against the dollar this year, forcing major manufacturers like Panasonic and Nissan Motor Co. to shift some production out of Japan.

Barclays Capital expects growth in industrial production to slow through the first quarter of 2012. But its chief economist in Japan, Kyohei Morita, does not believe that will lead to recession for the world's No. 3 economy.

Starting the second quarter, domestic demand will fuel growth as reconstruction after the March 11 earthquake and tsunami gains momentum, Morita said in a research note.

Shipments rose 0.6 percent from September, and inventories climbed 0.8 percent

http://www.boston.com/business/articles/2011/11/30/japan_factory_output_rises_but_outlook_weak/