Industrial production climbed a seasonally adjusted 2.4 percent in October for the first rise in two months, led by the vehicle and general machinery sectors, government data showed Wednesday.
Looking ahead, manufacturers polled by the Ministry of Economy, Trade and Industry anticipated that output would shrink 0.1 percent in November amid concerns over disrupted supply chains after the recent flooding in Thailand. They expected, however, that output will rise 2.7 percent in December.
Given the October data and the forecast for the following two months, METI maintained its basic assessment that the trend for industrial output in general appears to be "flat."
Shuichi Obata, senior economist at Nomura Securities Co., said the bigger than expected rebound in October's production followed a 3.3 percent drop the previous month and was supported by firm output of vehicles with relatively low inventory ratios.
"Considering the output projection for the coming months, which factors in the Thai flooding, the report showed that the risk of industrial production tumbling toward early next year has been mitigated," Obata said.
He added, however, the pace of the recovery will only be moderate for the time being due partly to the effects of the yen's appreciation against other major currencies, which makes Japanese products more expensive abroad and erodes the global competitiveness of the nation's exporters.
For October, the index of output at factories and mines stood at 92.7 against the base of 100 for 2005, the ministry said in a preliminary report.
By sector, output by transport equipment makers surged 11.6 percent in October, reflecting increased production of vehicles for shipment to North America and Europe, as well as strong production of small vehicles for the domestic market.