— Japan Govt Upgrade of Overall Assessment 1st In 7 Months
— Japan Govt Upgrades View On Output For 1st Time In 19 Months

TOKYO (MNI) – The Japanese government on Friday slightly upgraded
its overall assessment of the economy for the first time in seven
months, noting brighter signs in some areas while the economic recovery
is still stalling after snapping back from the 2009 global recession.

In its monthly report for January, the government said, “Although
the economy is pausing, signs toward picking up are partially seen.”

The government began describing Japan’s economy as “pausing” in
October last year.

The upward revision is largely based on recent data that have shown
industrial production and automobile sales appear to be out of the woods
now, Fumihira Nishizaki, director of macroeconomic analysis at the
Cabinet Office, told reporters.

In today’s report, the government upgraded its view on industrial
production, saying it “shows signs of an end to the recent drop.”

This is the first upgrade for output in 19 months since June 2009.
The government said production was “decreasing recently” last month.

According to the METI, industrial production posted an unrevised
1.0% rise in November m/m, marking the first rise in six months. Also,
output is expected to show month-on-month gains of 3.4% in December
and 3.7% in January.

Nishizaki said, “It is highly possible that output in January-March
will be above that in October-December.”

Output of transportation machinery including automobiles, which
carry a heavy weighting in industrial production, rose a revised 4.5%
m/m, posting the first gain in seven months, according to the Ministry
of Economic, Trade and Industry.

Last month, METI reported its survey of firms’ forecasts, which
showed that production of transportation machinery would rise by 4.8%
m/m in December before increasing by 7.3% in January.

As for the demand side of the economy, seasonally adjusted sales of
passenger cars whose engine displacement is over 660cc rose 7.3% on
month in December, recovering from -2.2% in November and -21.0% in
October.

Compared with year-earlier levels, automobile sales have slumped
since the rush purchases last summer before the government ended its
subsidy program for buying energy-efficient vehicles in early September.

The government noted that corporate goods (producer) price have
been rising gradually and the pace of year-on-year drop in consumer
prices is decelerating.

But Nishizaki said, “Our view that the economy is in a mild
deflation remains unchanged.”

tokyo@marketnews.com
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