Consumer sentiment has been improving since about half a year ago.
As sales and profits continue to expand despite surging basic material prices, Japanese firms are willing to boost investment to deal with growing demand.
With exports to China, demand -- which had slowed late last year -- is now seeing a solid rebound, and with firm demand in the US continuing, Japanese exports are most likely to maintain brisk gains in the near term.
Amid the continued recovery of corporate activity, which reduces anxiety about job security, Japanese consumers seem to be increasingly willing to spend more, and that trend is most likely to be sustained going forward.
With exports now recovering and domestic demand rising steadily, production activity is likely to maintain its rising trend in the near-term.
The possibility is high that an improvement in labor and wage conditions will continue to support consumer spending going forward.
Japan's overall consumer spending is pretty firm as a trend because wages are rising.
With export demand now recovering following the completion of IT inventory adjustments in 2005 and domestic demand expanding solidly, production is likely to continue its rising trend in the near-term, even if there are some monthly fluctuations.
Although it was a bit weaker than expected, output rose for five months in a row and rose more than one percent for the second consecutive month, showing its firmness.
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