Japan's industrial output rose a stronger than expected 2.7 percent in September from the month before, government data showed Wednesday, signaling that demand may be starting to recover from the dent caused by April's tax hike.

After a 1.9 percent fall in August, the seasonally adjusted gain — due partly to robust demand in autos and electronics devices — surpassed the average market forecast of a 2.2 percent increase and brought the index of output at factories and mines to 97.8 against the base of 100 in 2010, the Ministry of Economy, Trade and Industry said in a preliminary report.

METI upgraded its basic assessment of output, saying it is fluctuating between positive and negative territories. In August, it said production has "weakened."