Japan's industrial production rises slightly in October

Chimneys of an industrial complex and Tokyo's skyline are seen from an observatory deck at an industrial port in Kawasaki, Japan, on Oct 24, 2016.
Chimneys of an industrial complex and Tokyo's skyline are seen from an observatory deck at an industrial port in Kawasaki, Japan, on Oct 24, 2016.PHOTO: REUTERS

TOKYO (BLOOMBERG) - Japan's industrial production was slightly stronger than economists forecast in October, as exports compensated for continued weak domestic spending.

Industrial output rose 0.1 per cent in October from a month earlier. Output is forecast to rise 4.5 per cent in November, then fall 0.6 per cent in December.

Today's data reflect the strength of trade, which was the main driver of third-quarter growth. 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.

"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.

Industrial output fell 1.3 per cent from a year earlier. Measured month on month, shipments rose 2.2 per cent in October, while inventories fell 2.1 per cent.