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Japanese Factory Output Continues To Rise

Japan's factory output rose 1.4 percent in September, the seventh consecutive increase, as recovering global trade boosted demand for the country's cars and electronics.

TOKYO (AP) -- Japan's factory output rose for the seventh straight month in September, as recovering global trade boosted demand for the country's cars and electronics.

Industrial production -- a key barometer of the country's economic health -- rose 1.4 percent from August and "continues to show an upward movement," the government said Thursday.

The figure outpaced a 1.0 percent rise forecast in a Kyodo News agency survey of economists. Strong gains among manufacturers of transport equipment, electronics parts and electrical machinery contributed to the gains, according to the Ministry of Economy, Trade and Industry's monthly report.

The latest numbers offer encouraging signs of growth in the world's second biggest economy, which fell into its worst recession since World War II earlier this year.

Stimulus spending by governments around the world, particularly China, is reviving sales of Japanese products. Exports in September fell by the smallest margin in 10 months as a result.

At home, consumer incentives are also driving demand for eco-friendly appliances and cars.

Production is expected to continue expanding for the third straight quarter in October-December after posting a 7.2 percent rise in the July-September period. The ministry predicts output will grow 3.1 percent in October and 1.9 percent in November.

Shipments rose 3.4 percent, while inventories slipped 0.5 percent.

Still, some economists tempered their confidence of Japan's prospects with predictions the current growth may not last. The country's unemployment rate is stuck at a near-record high of 5.5 percent as companies remain wary of spending and hiring. Concerns about deflation are also intensifying after prices in Japan tumbled at a record pace in August.

"For the time being policy expectations should support production growth," Goldman Sachs economist Chiwoong Lee said in a note to clients. "But we continue to warn of downside risk for demand in the current employment and income situation when the policy boost in Japan and overseas starts to fade."

A more complete snapshot of Japan's economy will emerge when the government on Friday releases unemployment and consumer price index data for September.

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