* Yr/yr output up for third straight month to 8.72 mln tonnes
* Output down 2.5 pct from December
* Exports and car demand support recovery (Adds comment, further background)
TOKYO, Feb 18 (Reuters) - Policies aimed at boosting demand for cars and homes in emerging markets helped Japanese mills increase crude steel output by more than a third in January from a year ago.
A nearly 37 percent jump in January to 8.72 million tonnes was the third-straight monthly increase in crude steel output and in line with recent economic indicators which have shown the Japanese economy is on a moderate recovery path.
For trends in steel and industrial output, click on:
“The data shows that finally, the upward momentum (in steel output) is strengthening,” said Tomomichi Akuta, senior economist at Mitsubishi UFJ Research and Consulting.
According to a Reuters poll issued on Wednesday, Japanese manufacturers are becoming steadily less pessimistic about economic conditions and at their least gloomy since July 2008 as the economy recovers on the back of exports, particularly to emerging economies. [ID:nTOE61G00L]
The stimulus-fuelled rebound in domestic demand and a corporate investment revival have also helped mask rising deflationary pressure and the risk of a slowdown in 2010, as Japan’s economy grew faster than expected in the fourth quarter. [ID:nTOE61805L]
Japan’s core machinery orders jumped in December to secure the first quarterly rise in the key measure of capital spending in almost two years, but the data also pointed to little confidence of recovery in the months ahead. [ID:nTOE61708J]
“There were concerns about the weakness of capital spending, but recent data showed that investment money is gradually returning to big machinery and buildings,” he said.
There are also signs of the U.S. economy bottoming out.
U.S. housing starts rose to a six-month high in January and industrial output increased solidly, pointing to an economic recovery taking a firm hold and respectable first-quarter growth. [ID:nN17114831]
“It (the steel data) suggests that the developed economies have emerged from their slump in the recent financial crisis, and that this recovery trend will continue. But it will still lack the strength of a full-fledged recovery,” Akuta said.
Japanese steelmakers, including the world’s second-biggest steelmaker Nippon Steel Corp (5401.T) and the No.6 JFE Holdings Inc (5411.T), have boosted exports of high-grade steel, such as galvanised sheet steel, tinned plates and magnetic sheet steel, to South Korea, China and other Asian countries. (Editing by Ed Lane) (Reporting by Yuko Inoue, Chikako Mogi; Editing by Joseph Radford)