Positive outlook for Japan as factory output hums

Japanese industrial production rose slightly in October, according to government data on Thursday, adding to signs that the world's third-largest economy is recovering.

Industrial production rose 0.5% mom in October, according to the Ministry of Industry, following a 1.0% decline in September.

The increase was however below market expectations of a 1.8 percent rise, as declines in the production of electronic devices and petroleum products offset gains in electrical machinery and transport equipment.

"The last figure is lower than expected, but given other data released recently – a strong commercial sentiment in the manufacturing sector and exports, among others – I think the country's economic outlook is positive ", said Yoshiki Shinke Dai-ichi Life Research Institute.

Japan's prospects have recently improved thanks to investments related to the Tokyo 2020 Olympic Games, which has boosted the economy.

The economy grew 0.3% in the third quarter of the year, recording its seventh consecutive quarter of economic growth.

July-to-September quarterly growth was the longest series of gains in more than 16 years, although the rate of expansion slowed.

However, wage increases were lukewarm and inflation-raising efforts fell flat despite years of aggressive monetary easing by the central bank of Japan.

At the end of October, the Bank of Japan reduced its annual inflation forecast while maintaining its ultra-flexible monetary policy, with prices well below its 2% inflation target.

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