Japanese industrial production rose by more than expected in December, data on Thursday showed, providing a further boost to the yen, which has been among the strongest major currencies amid recent market turbulence.
Industrial production rose 2.9% month-on-month in December, after rising 2.7% in November. Markets had expected a repeat of the 2.7% seen in November.
This helped boost the annual rate of production to 4.4% in December, from 4.2% in November. This also beat markets expectations of a dip to 3.9%.
Shipments increased 2.9% over the month, while inventories fell 0.3%, suggesting strong foreign demand for Japanese-produced goods.
The yen gained 0.53% to Y106.44 against the dollar and was up 0.26% to Y132.90 against the euro on Thursday.
The yen has gained 5.55% against the US currency this year amid widespread dollar weakness.
Despite the widely diverging monetary policies between the US and Japan, the yen has found support from growing expectations the Bank of Japan will soon be prompted to withdraw stimulus as economic growth recovers and inflation gathers pace.
The currency's most recent gains came after Japan's finance minister Taro Aso (left) said on Thursday that the recent strengthening in the yen did not necessitate forex intervention.
He told Japan's parliament: "From our perspective, the current situation doesn't warrant special intervention. The yen isn't rising or falling abruptly."
Picture by Wikimedia Commons