Japan’s industrial production likely to have recovered further in November

Japan’s industrial production is expected to have recovered further in November. According to a Societe Generale research report, industrial production is likely to have risen 1.7 percent sequentially in November. It is quite clear that producers have adjusted their inventories considerably. Moreover, real exports are beginning to rebound as well.

The strong growth in November would possibly affirm that the production and inventory cycles have bottomed out and have moved back into an uptrend. METI’s survey of production projections for December would possibly be upwardly revised. Industrial production for the fourth quarter would possibly expand again following positive growth in the second and the third quarter, therefore further affirming that production is on a stable path of rebound, noted Societe Generale. There is possibility that METI would revise up its assessment from “shows signs of increase at a moderate pace” to “shows signs of increase”.

But in next year, as individual nations overcome the uncertain in the global economy and markets through policy actions, the resilient growth in the developed nations should have an upbeat impact by assisting the emerging markets to escape their stagnation, stated Societe Generale.

Meanwhile, manufacturing workers are beginning to increase again, implying an expansion in capital goods production. These factors in turn are expected to further underpin the rebound in industrial production.