Japan's factory output rose in November and manufacturers expect to ramp up production in coming months, data shows, underscoring the central bank's view that a pick-up in global demand will underpin a steady economic recovery. As Sonia Legg reports, the data comes as some bankers and lawyers say Japan Inc could become a more important force in dealmaking next year.
Japan's Prime Minister has been trying to make a difference by offering his condolences to those killed at Pearl Harbor. He's hoping his economic policies will also reap rewards and there are positive new signs. Trade ministry data showed Japan's factory output rose 1.5 percent in November. And manufacturers expect to ramp up production by 2 percent this month and 2.2 percent in January. Retail sales also increased and inventory fell for three straight months, suggesting a broader improvement in the economy. (SOUNDBITE) (English) JAN RANDOLPH, DIRECTOR OF SOVEREIGN RISK, IHS MARKIT, SAYING: "They can probably expect more exports, a little bit more fiscal stimulus. More fundamentally the kinds of structural measures that they are thinking about like the tax relief for women for greater labour participation is very, very positive." A weaker yen thanks to a stronger dollar has been helping. And Japan could benefit from a slowing China in 2017. Some bankers and lawyers say Beijing's crackdown on capital outflows is preventing some Chinese companies making foreign acquisitions. That could be an opportunity for cashed up Japanese companies seeking growth abroad. (SOUNDBITE) (English) JAN RANDOLPH, DIRECTOR OF SOVEREIGN RISK, IHS MARKIT, SAYING: "Japan is always terribly important not just regionally but internationally in terms of capital because it just sits on so much savings - it's got the largest savings pool in the world. An increasing proportion of that floods in and out of Japan. I think we can expect more outflows." Recent deals include Asahi's purchase of Anheuser-Busch InBev's eastern European beer brands for $7.6 billion dollars. That's a tiny fraction of the cash Japanese firms are apparently hoarding. According to government data that figure currently stands at a record $3.2 trillion dollars.