Industrial production rose a seasonally adjusted 0.6 percent in October, capping three straight months of gains for the first time in two years and spurring the government Tuesday to hike its basic assessment of output.
Industrial output "is on a moderately upward trend," the Ministry of Economy, Trade and Industry said in the preliminary report, ditching its 13-month-old description, "Production tended to be flat."
It is the first upgrade to production since March, when METI changed its assessment from "picking up" to "gradually recovering."
The market, however, was expecting a 1.2 percent month-on-month expansion for October.
The index of output at mines and factories stood at 102.1 against the base of 100 for 2000, the highest since 102.5 in April. Looking ahead, METI said manufacturers forecast a 4.6 percent expansion in industrial production in November and a 0.6 percent uptick in December.
A METI official said the basic judgment was revised because the index posted the third straight monthly gain for the first time since the September-November period in 2003 and that steady growth was forecast in the coming months.
The latest data represent "a positive growth cycle" in industrial output, with production and shipments steadily expanding and inventories on the retreat, said Koji Fukaya, an analyst at Bank of Tokyo-Mitsubishi.
"In Japan, the output of electric parts and devices for information technology industry has gotten out of a stagnant period and is expanding steadily," Fukaya said. "The upward revision reflects the end of inventory adjustments at global levels."