"We don't need to be too pessimistic about the outlook"
- Naoki Iizuka, an economist at Citigroup Inc.
Output at Japanese manufacturers, mines, and utilities expanded in December less than initially was expected, a sign the world's third-largest economy may be stabilizing thanks to stronger global demand and government spending. According to the Trade Ministry, output rose 2.5% from November, when it declined 1.4%, while the reading came below analysts' expectations of a 4.1% gain. On a yearly basis, industrial production tumbled 7.8% - also missing expectations for a decline of 5.6% following the 5.5% fall in the preceding month. Despite Thursday's reading, the outlook for the world's third largest economy may improve this year, as the depreciating Yen and Prime Minister Shinzo Abe's fiscal stimulus measures are likely to help to support corporate profits and overall economic performance.
"We don't need to be too pessimistic about the outlook," said Naoki Iizuka, an economist at Citigroup Inc. in Tokyo. "Production will probably return to a clear recovery track in the coming months."
"Generating enough demand to create a sustained recovery has been an uphill battle for policymakers," Moody's said in a commentary Thursday citing barriers to growth such as Japan's shrinking workforce and high savings rate.
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