Industrial production grew for the first time in two months in December, prompting the trade ministry to upgrade its basic assessment on production for the first time in 11 months, the government said Thursday.
Reporting that industrial output grew a seasonally adjusted 2.5 percent from November, the Ministry of Economy, Trade and Industry said production "shows signs of having bottomed out."
For the 12 months through December, the unadjusted index of output at factories and mines shed 0.3 percent, reflecting the tough external economic conditions amid the eurozone debt crisis and the slowdown in the Chinese economy.
The annual decline followed a 2.3 percent drop in 2011, when supply chains were disrupted by the massive earthquake and tsunami in northeastern Japan.
Turning to the data for December alone, an industry ministry official said that cautiousness remains over production but that he expects "positive effects" to stem from the yen's depreciation and the government's temporary stimulus measures.
A strong yen has been a concern for Japanese exporters, as it erodes the value of their earnings when repatriated. But the currency started falling against the dollar after it became clear the new government led by Shinzo Abe would pursue bold fiscal policy and credit easing after the December election.
The seasonally adjusted production index stood at 88.9 in December against the base of 100 for 2005, the preliminary report said. The index for industrial shipments rose 4.4 percent to 90.6, while the one for inventories fell 1.1 percent to 105.2.
By sector, production by transport equipment makers rose 6.9 percent, helped by increasing demand for cars in North America. General machinery makers saw output rise 8.7 percent.