Japan factory output up 1.7%, but deflation remains

Japanese factories churned out a better-than-expected performance in April,
but the upbeat data Friday was tempered as the export powerhouse remained
mired in deflation.
Economists were keeping a close eye on a string of data released Friday morning
including factory output, unemployment, inflatio
and household spending figurefor clues as to whether a plan by Prime Minister Shinzo
Abe and his hand-picked team at the Bank of Japan (BoJ) was taking hold.
Dubbed "Abenomics", the policy prescription of big government spending and aggressive
central bank easing to stoke the world's third-largest economy has helped push the
yen into a steep decline which benefits Japan's exporters.
Investors have cheered the moves, sending the Nikkei 225 soaring since December as
the benchmark stock index skyrocketed nearly 60 percent at one stage before
jaw-dropping volatility in the past week saw a 7.3 one-day tumble and another
decline of more than 5.0 percent on Thursday.
The index had bounced back in early Friday trade, rising 1.80 percent, as markets
reacted to a weakening yen and the economy ministry figures which showed an
April factory output rise of 1.7 percent rise over a month earlier.