The health of the Japanese economy remains a genuine puzzle for investors. Recent data showed that Japanese output fell in the last three months of 2004, suggesting the economy was technically in recession. That was followed by weak export numbers for January.
But yesterday's figures were all upbeat. The manufacturing sector's purchasing managers' index moved up to 51.7, above the key 50 level, with exports to China particularly strong. There was even better news on industrial production, which rose 2.1 per cent month-on-month, well ahead of the consensus forecast. The 5.7 per cent jump in retail sales was clearly an erratic number but still looks encouraging given that sluggish consumer demand was a problem in the second half of last year.
