JAPAN yesterday posted its first factory output expansion in three months, official data showed, offering some rare good news after a string of weak figures threw cold water on recovery hopes.

    The upbeat figures — a 3.7 percent rise month on month in January — comes as investors look for clues about the state of the world’s third-largest economy, as disappointing inflation figures last week stirred speculation the Bank of Japan will have to unleash more monetary easing to boost growth.

    Japanese businesses have remained cautious over investing in their businesses and offering significant wage increases, citing the uncertain outlook.

    The once-powerhouse economy contracted in the last quarter of 2015 and the bad news stretched into January when Japan swung back into a trade deficit as exports to key market China plunged.

    That was Japan’s second quarterly contraction in 2015 and dealt another blow to Prime Minister Shinzo Abe’s bid to slay deflation and kickstart the economy, dubbed Abenomics.

    Analysts said the positive industrial production figures may not last.

    “The rebound in industrial production in January is unlikely to assuage concerns about the health of Japan’s economy as firms are predicting a renewed slump in February,” Marcel Thieliant from research house Capital Economics said in a commentary.

    “This jump in activity should be reversed soon.” (SD-Agencies)