Japan's industrial production rose for a fifth month in December, the longest run of gains since 1999, on an increase in domestic sales and exports of electronics and autos.
Production rose a seasonally adjusted 1.4 percent to a record from November, the Ministry of Economy, Trade and Industry said in a report in Tokyo today.
Stocks rose, lifting the Nikkei 225 Average to the highest since September 2000, on optimism sales will rise at companies such as Sharp Corp. and Toyota Motor Corp. Increases in output and capital spending may help the world's second-biggest economy keep expanding from what was probably the fastest pace of growth in five years in 2005.
``Strong overseas and domestic demand are fueling production, as well as supporting overall economic growth,'' said Seiji Adachi, senior economist at Deutsche Securities in Tokyo.
The Nikkei average rose 0.6 percent to 16,551.23 at the close in Tokyo. The yield on the 1.4 percent bond due December 2015 rose 1.5 basis points to 1.565 percent, the highest since Dec. 22.
The median estimate of 29 economists in a Bloomberg News survey was for production to increase 1.8 percent. The last time there was an increase of more than four months was the period between July and November 1999, according to Bloomberg Data.
Production increased 2.7 percent in the three months ended Dec. 31, the biggest gain in two years.
Manufacturers expect to increase production 0.9 percent this month and reduce it 1.4 percent in February, today's report said. Estimates provided in the report have lagged actual figures every month since February 2004.
The U.S. economy, the destination for more than one-fifth of Japan's exports, grew at a slower-than-expected 1.1 percent pace in the fourth quarter as consumers spent at the slowest rate since 2001. China's economy accelerated 9.9 percent in the final three months of the year.
Japan's economy probably grew 2.5 percent in 2005, the fastest pace since 2000, according to a Bloomberg survey of 13 economists. Business and consumer spending took over from exports as the main driver of growth.
Imports and exports rose by the most in more than a year in December, evidence that both domestic and overseas demand are supporting growth.