Japan’s industrial production rises a little in October

Japan's industrial output rose slightly by 0.1 percent in October from the previous month, signaling a moderate growth, official data showed Wednesday. The Japan's industrial production was slightly stronger than economists forecast in October, as exports compensated for continued weak domestic spending.

Japan's economy has been expanding at a gradual pace since the beginning of the year, but the business sector has largely kept spending on hold, given the unclear direction of the global economy, keeping a tight leash on production, investment and wages for workers.

Compared to the same period a year ago, output fell 1.3%, official data showed. While shipments rose 2.2% from the previous month, but were down 1.8% year-over-year.

The released data reflect solid trade, exports, measured month on month, gained for a third month in October, while household spending and retail sales both declined when compared to the previous year. The yen has weakened since President-elect Donald Trump’s surprise win earlier this month, supporting the outlook for shipments.

Since the U.S. presidential election on Nov. 8, the yen has depreciated over 10 percent versus the U.S. dollar. The possibility of yen's further depreciation against the dollar is rising in short term amid expectation of rate hike by the U.S. Federal Reserve next month, according to analysts.

In October, industrial output in the electronics parts and devices sector, which manufactures liquid crystal panels and chips, grew 4.6 percent, the highest among all sectors.

In the same month, the transport sector including the auto sector, the country's key industry, inched up 0.6 percent

"The results weren’t bad as shipments had a good gain and inventories fell, with a slight gain in production," said Yoshiki Shinke, chief economist at Dai-ichi Life Research Institute in Tokyo.

"Japan’s economy will likely head for a recovery in 2017, helped by a pick-up in exports and the effects of the economic stimulus measures," he said.

“A pick-up in global demand for IT items such as smartphones, and recoveries in economies in the U.S. and Asia, are helping Japanese exports and production,”  said Shinke.

"The US economy and China's economy are recovering, which bodes well for Japanese exports and production," Hiroaki Muto, chief economist at Tokai Tokyo Research Center in Tokyo, said before the data was released.

"Japan's economy will probably maintain a recovery trend in the fourth quarter as overseas demand looks solid, even as domestic demand may struggle to gain momentum," Mr. Muto said.