Japan surpassed expectations for its November industrial output as companies predict a further increase in December. This is due to strong demand overseas which continuously supports factory activity as well as larger economic growth.
Retail sales showed positive impulse, topping last month’s expectations. The retail went up as consumers spent more on electronics, fuels, and cars as a good sign for domestic demand.
The data helped to push up growing optimism among government officials and the Bank of Japan policymakers. The two sides expect the economy to have the ability to continue the recent run of strong growth till 2018.
November industrial output was projected to be at 0.5 percent rise but was instead of a 0.6 increase. This followed a 0.5 percent gain in October.
Industrial output for November rose because of increase in the production of memory chips. As well as equipment used to make semiconductors, and heavy machinery used in construction. This was according to Thursday’s trade ministry data.
The Ministry of Economy, Trade, and Industry conducted a survey of manufacturers. They predicted an output rise of 3.4 percent in December but dropping 4.5 percent in the first month next year.
Japanese retail sales were up to 2.2 percent in November from last year. This is more than the median forecast of a 1.2 percent increase, as was shown in government data on Thursday.
BOJ Board Members Debate on Rates
Some of the Bank of Japan board members called for a debate about increasing the interest rates or the lessening of exchange-traded funds purchase. This is in answer to the improving outlook. The call for debate was shown in the summary of opinions expressed at last week’s policy meeting.
According to BOJ board member, if it’s expected that the prices and economic outlook will improve, they must first consider if “adjustments in the level of interest rates will be necessary.”
“Consumer spending is doing well, supported by rising stock markets. The BOJ’s policy focus is on interest rates, so it is only natural to question its purchases of risk assets,” said senior economist Hiroshi Miyazaki.
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