"Japan's economy is recovering moderately. Overseas economies as a whole are generally heading toward a pick-up, although a lackluster performance is partly seen."
-The Bank of Japan
Japanese companies are continuing to benefit from the government's Abenomics, as July's industrial production rose above analysts' expectations, reinforcing a view the economic recovery is picking up. The nation's Ministry of Economy, Trade and Industry said overall output of industry soared 3.4% in the middle of summer, up from 3.2% expected earlier. On an annual basis production advanced 1.8%, ending a year-long period of contraction. Figures also showed shipments from Japanese companies surged both monthly and annually, rising 2.0% and 1.4% respectively. Furthermore, inventories jumped 1.6% monthly and 2.8% compared with a same period last year. This data can be a welcoming signs for the government, as industrial production is a leading indicator of economic health, since production reflects all ups and downs in the business cycle.
At the same time, among widely discussed hike in consumption tax, Japan is also considering a cut in corporate income taxes. As a part of a stimulus package to cushion the world's third largest economy from the jump in sales tax, Shinzo Abe has instructed officials to assess a cut in the tax on company profits. Currently, the rate of Japan's corporate tax stands at 38% due to a three-year increase to fund reconstruction in order to recover the economy after a 2011 natural disasters.
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