Japan factory output rises for first time in three months

Japan on Monday posted its first factory output expansion in three months, official data showed, offering some rare good news after a string of weak figures threw cold water on recovery hopes.

The upbeat figures -- a 3.7 percent rise on-month in January -- comes as investors look for clues about the state of the world's number three economy.

Disappointing inflation numbers last week stirred speculation the Bank of Japan will have to unleash more monetary easing to boost prices and growth.

Japanese businesses have remained cautious over investing in their businesses and offering significant wage increases, citing the uncertain outlook.

The once-powerhouse economy shrank in the October-December period, Japan's second quarterly contraction in 2015.

The bad news stretched into January when the country swung back into a trade deficit as exports to key market China plunged, dealing another blow to Prime Minister Shinzo Abe's bid to kick-start the economy.

"It's sign that production is improving, albeit at a slow pace," Hidenobu Tokuda, senior economist of Mizuho Research Institute, said of the industrial production figures.

"But the export trend is still not very strong given the downside risks for the global economy... If the US economy picks up, that will help Japanese exports."