Japan achieved a modest increase in industrial production in March (+0,2%), the month in which the unemployment rate reached its lowest level in the last four years. The quarterly figure (January-March) of industrial production indicates an even greater increase, equal to 1,9 per cent.
The Government is now optimistic about the future. The new data adds to the Japanese central bank's projections for both rising inflation and growth. The new inflation forecasts are particularly welcome in a country that has been battling deflation for years. Analysts say the recovering data is a sign that Prime Minister Shinzo Abe's economic and monetary policy, dubbed "Abenomics," is having an impact at a time when consumer and business confidence are also on the rise.
However, Credit Agricole economist Yoshiro Sato remains cautious of growth in March and points out that a weakening yen is not a magic recipe for recovery unless currency devaluation is accompanied by a recovery in both domestic demand that external.
