Evidence of a long-awaited turnaround in the world's second-biggest economy took share prices higher, with the Nikkei 225 index ending nearly 75 points up at 20,589.20. Economists said signs of a pick-up would help to ease fears that the industrial world as a whole was heading for recession.
Tomio Tsutsumi, the vice-minister for trade and industry, said: "The degree of certainty concerning Japan's economic recovery has increased."
Industrial output climbed 0.8 per cent in December, an increase well above expectations. It was the third monthly rise in a row, and manufacturers said they expected even bigger increases in January and February.
Public works projects contributed to the increase in output last month. So did output of semiconductors, mobile phones and kerosene heaters, due to cold weather.
The Economic Planning Agency said separately that investment spending by Japanese firms was expected to grow 4 per cent in the year to March and another 2.4 per cent the following quarter. This compared with a rise of less than 1 per cent in the year to December.Reuse content