Already a Bloomberg.com user?
Sign in with the same account.
Japan and South Korea reported larger-than-forecast industrial production in January amid a strengthening U.S. recovery and signs that Europe’s sovereign- debt crisis may be contained.
Japanese output rose 2 percent from the previous month, the Trade Ministry said in Tokyo today. That exceeded the median estimate of 1.5 percent in a Bloomberg News survey of analysts. Korean production climbed 3.3 percent, a government report showed, versus a forecast 0.5 percent decline.
A Chinese manufacturing index for February, due to be released tomorrow, will show a third straight expansion, a separate survey of analysts indicates. Asian stocks are poised to enter a bull market by rallying 20 percent from a two-year low in October, while the Dow Jones Industrial Average closed above 13,000 in New York for the first time since 2008.
“The U.S. is improving, Europe is stabilizing, and Asia is chugging along at a healthy pace,” said Matthew Circosta, an economist at Moody’s Analytics Australia Pty Ltd. in Sydney, who correctly predicted Japan’s output. “China is likely to have a soft landing.’”
In Japan, industrial production is at the highest levels since the earthquake and tsunami last March, with today’s report indicating that manufacturers will boost output this month and next. Exports of vehicles from Japan increased 4.1 percent in January.
The MSCI Asia Pacific Index (MXAP) advanced 0.9 percent to 129.43 as of 2:44 p.m. in Tokyo. A close above 128.82 would mark the beginning of a bull market.
Elsewhere in the region, Australia’s retail sales advanced in January for the first time in three months, gaining 0.3 percent from a month earlier, the Bureau of Statistics said. India’s gross domestic product rose 6.1 percent last quarter from a year before, less than the 6.3 percent forecast by economists, reinforcing evidence of Asia’s slowdown at the end of 2011, when economies including Japan’s and Singapore’s shrank.
In the U.S., a report today may show the world’s biggest economy expanded at a 2.8 percent annual pace in the fourth quarter, which would be the fastest in more than a year. In Greece, lawmakers have ratified a 3.2 billion-euro ($4.3 billion) package of spending cuts, taking Prime Minister Lucas Papademos one step closer to securing a rescue package to avert financial collapse.
Japan’s economy, the world’s third-biggest, may be aided by progress in containing Europe’s debt crisis, a weakening yen and monetary easing in emerging nations, said Jun Kawakami, an economist at Mizuho Securities Co. in Tokyo.
“There’s no need to be excessively pessimistic about the outlook for Europe,” Kawakami said before today’s report.
In South Korea, the finance ministry and central bank today said that the world economy may be set for a “modest recovery” that will aid the nation’s exports. Europe’s economy is “sluggish,” while the U.S. is showing signs of improvement and demand will be maintained in emerging economies, the officials said.
Japan’s currency has weakened since the Bank of Japan (8301) announced extra monetary stimulus and set an inflation goal on Feb. 14, trading at 80.41 as of 1:48 p.m. today in Tokyo, compared with a postwar high of 75.35 in October.
Besides the boost to exports from declines in the yen, manufacturers are benefiting from incentives for purchases of environmentally friendly cars and a fading of disruptions to supply chains from flooding in Thailand. Car sales jumped 24 percent in January from a year earlier, the most in 22 years, a government report showed yesterday.
“The revival of the eco-car subsidies will likely help domestic production maintain a firm footing,” Kyohei Morita, chief economist at Barclays Capital in Tokyo, said before today’s report. Nissan Motor Co. is forecasting a net income for 2011 of 290 billion yen ($3.6 billion) and earlier this month Toyota raised its net income forecast for the year by 11 percent.
Prime Minister Yoshihiko Noda’s 2.5 trillion yen ($31 billion) extra budget, passed by the parliament this month, included 300 billion yen for the subsidy program. The program will help automakers increase sales by 900,000 vehicles in their home market during 2012 after a record 14 percent drop in 2011, Toshiyuki Shiga, chairman of the Japan Automobile Manufacturers Association, said in December.
To contact the reporter on this story: Keiko Ujikane in Tokyo at email@example.com
To contact the editor responsible for this story: Paul Panckhurst at firstname.lastname@example.org