Japanese industrial output rises for first time in six months
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Another economic ‘green shoot’ -- this one sprouting across the Pacific:
The Japanese government early Thursday said industrial output rose 1.6% in March, double the 0.8% gain that economists had expected.
From Bloomberg News:
Output rose for the first time in six months, adding to evidence the worst of the recession may be over. Companies plan to increase production in April and May to replenish inventories that fell 3.3% last month, the report also showed. ‘We’ve passed the bottom in terms of the level of production,’ said Masamichi Adachi, a senior economist at JPMorgan Chase & Co. in Tokyo. ‘The negative side of things is that the recovery will be weak.’ Overseas shipments gained 2.2% in March from February, the first month-on-month increase since May.
The pickup in output last month was tiny compared with the crash of the previous four months. Output had plummeted 9.4% in February after a dive of 10.1% in January.
Still, investors are simply looking for signs of stabilization at this point.
The Japanese stock market surged early Thursday on the heels of powerful rallies in Europe and the Americas on Wednesday. The Nikkei-225 index was up 340 points, or 4%, to 8,833 about three hours into the trading session.
The Nikkei has risen 25% from its low in early March, lagging the 29% rise in the U.S. Standard & Poor’s 500 index in this rally. . . .
Some companies may have raised production last month just to restock depleted inventories, not to satisfy new demand, Bloomberg noted:
Manufacturers including Toyota Motor Corp. have cut stockpiles faster than sales have fallen, leaving room for a bounce in output that may be limited unless sales pick up. ‘Exporters are rebuilding inventories on the basis of expectations for shipments,’ said Dwyfor Evans, a strategist at State Street Global Markets in Hong Kong. ‘This is a little bit uncertain because if new orders remain at relatively low levels you’re not going to see a sharp rebound in production.’
The U.S. government’s report Wednesday on first-quarter gross domestic product also showed a huge drop in business inventories.
-- Tom Petruno