(Updates yen, stocks in fifth paragraph.)
Feb. 28 (Bloomberg) -- Japan’s industrial production rose for a second month, highlighting an improved economic outlook as the government nominated Asian Development Bank President Haruhiko Kuroda to be its new central bank chief.
Output climbed 1 percent from December, when it rose 2.4 percent, the Trade Ministry said in Tokyo today. The median estimate of 27 economists was for a 1.5 percent gain. Production fell 5.1 percent from the previous year.
The yen’s more than 11 percent fall against the dollar in the past three months is improving the outlook for exporters as Prime Minister Shinzo Abe calls for more monetary stimulus to end deflation. JPMorgan Chase & Co. said Abe’s proposed new BOJ new leadership team, announced by parliament today, could implement further easing as early as April.
“Japan’s recovery is underway,” said Naoki Iizuka, an economist at Citigroup Inc. in Tokyo, which accurately predicted the 1 percent rise. “Today’s data confirm that Japan’s economy is picking up and the pace of recovery in coming quarters will probably accelerate, helped by the global recovery and Abe’s stimulus.”
The yen was 0.2 percent weaker at 92.39 per dollar at 12:203 p.m. in Tokyo,. The Nikkei 225 Stock Average rose 1.9 percent in the morning session.
The ministry said that increases in production of cars and memory chips contributed to the overall gain in the month. A decline in production of electronic parts and devices capped the rise, it said.
Of the 138 companies on the Nikkei 225 Stock Average for which Bloomberg News has estimates, almost 64 percent beat earnings estimates for the most recent quarter, as a weaker yen pushes up profits.
In July, Honda Motor Co. will open its first new plant in Japan in almost 50 years, with an annual capacity of 250,000 vehicles. Honda’s share price has risen 42 percent since mid- November when the previous government announced the election that brought Abe to power.
Japanese exports rose for the first time in eight months in January as the yen weakened, with shipments to the U.S and China climbed.
Goldman Sachs Inc. last month raised its GDP forecast for the fiscal year starting in April to 2 percent from 1.2 percent, citing the weaker yen, fiscal stimulus and anticipated monetary easing. The median average of economists surveyed by Bloomberg News is for 1.4 percent annualized growth this quarter.
--Editors: Andrew Joyce, James Mayger