TOKYO (REUTERS) - Japan's factory output rebounded in June from a decline in May as production of cars and industrial chemicals increased, suggesting that economic expansion may be on a more stable footing.
Industrial output rose 1.6 per cent in June from the previous month, just below the median estimate for a 1.7 per cent increase and following a 3.6 per cent decline in May.
Manufacturers forecast a steady increase in output in the coming months, offering further evidence that firm overseas demand and gains in consumer spending could support overall growth in Japan's economy. Output in the transport sector rose 4.2 per cent in June, rebounding from a 13.0 per cent tumble in the previous month, as output of passenger cars and automobile recovered.
Output of chemicals rose 3.4 per cent in June, also a rebound from a 2.2 per cent decline in May.
Manufacturers surveyed by the ministry expect output to rise 0.8 per cent in July and 3.6 per cent in August.
The positive output reading follows data last week showing the biggest increase in household spending in almost two years and an increasingly tight labour market, building optimism that the economy will maintain its upward momentum.