Japan's industrial production probably rebounded from its biggest slide in 10 months, as car and electronics makers stepped up output to meet demand from Asia and emerging markets.
Production rose a seasonally adjusted 2 percent after dropping 1.6 percent a month earlier, according to the median estimate of 45 economists surveyed by Bloomberg News. The Trade Ministry releases the report on Jan. 30 at 8:50 a.m. in Tokyo.
Economists say the gains may not last as a U.S. recession could spill into Asia and other developing economies, where a growing consumer class is buying Japanese cars and electronics. Matsushita Electric Industrial Co. expects sales to China, Brazil and other emerging markets to rise 25 percent next year.
“Japan is finding more customers for its exports,'' said Richard Jerram, chief economist at Macquarie Securities Ltd. in Tokyo. Demand from Asia, Russia and the Middle East “gives hope that the slowdown over the next six months might not be too severe.''
Exports, the engine that drove almost all of Japan's third- quarter growth, rose 6.9 percent in December, as record shipments to Asia made up for a drop in sales to the U.S. Exports to Russia, which have doubled in the past two years, surged 40 percent.
Customer growth in emerging markets is one of the reasons Matsushita, the world's largest consumer electronics maker, expects sales to rise next year. The maker of Panasonic-brand electronics plans to invest in a 300 billion yen ($2.8 billion) factory to make liquid-crystal display televisions instant payday loan.
Toyota Motor Corp., the world's second-largest automaker, has been increasing output for four months even as U.S. consumer demand wanes.
The outlook for exporters including Toyota and Sony Corp., which make about a third of their sales in the U.S., still depends on how badly the world's biggest economy stumbles, Economic and Fiscal Policy Minister Hiroko Ota said this month.
“A U.S. slowdown affects Asia, beginning with China, and via that route it affects Japan,'' Ota said. “The extent to which Japan is hurt depends on the severity of the U.S. slowdown.''
A three-quarters percentage point cut by the U.S. Federal Reserve last week hasn't fully allayed concerns over the economy. UBS AG expects the U.S. to fall into a recession in the first half of the year and exert a drag on the world's growth, including Japan's, UBS said.
UBS cut its 2008 growth estimate for Japan to 1.2 percent from 1.6 percent.
“Slower world growth suggests the outlook for Japanese production isn't great,'' said Akira Maekawa, a UBS economist in Tokyo. “And that suggests, as the Bank of Japan keeps saying, the economy will slow `for the time being.'''