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Japan December factory output up 2.5% on-month: government

Japan on Thursday said the nation's factory output for December rose 2.5 percent from the previous month thanks to brisk production of cars and semiconductors.

The gain -- still worse than a 4.0 percent expansion expected by the market -- came as Japan's new government under Prime Minister Shinzo Abe vows to breathe new life into the world's third-largest economy with huge stimulus and easing aimed at tackling long-running deflation.

"Industrial production shows signs of having bottomed out," said a statement from the economy ministry.

The ministry added that a survey of manufacturers found they expected another output increase for January and February of 2.6 percent and 2.3 percent, respectively.

Annual industrial output figures were not immediately released, but on a quarterly basis the country's factory output was down 1.9 percent from the previous three months.

And the rosy monthly data comes just a week after Japan said it logged a record trade deficit for 2012 as exports were hit by a bitter diplomatic spat with its biggest market China and plunging demand in debt-wracked Europe.

Japan's economy contracted in the third quarter, meeting the technical definition of a recession.

The figures underscored the size of the task ahead for the new government which has heaped pressure on the Bank of Japan for aggressive easing measures to boost the country's fortunes.