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Japan December industrial output rises 0.5 percent, beats expectations

By Minami Funakoshi

TOKYO (Reuters) - Japan's factory output rose for a second straight month in December and household spending fell less than expected, in a welcome - if modest - sign of economic recovery.

Industrial output rose 0.5 percent in December from the previous month, preliminary government data showed on Tuesday. The result compared with a median market forecast of a 0.3 percent increase.

Manufacturers surveyed by the Ministry of Economy, Trade and Industry expect output to rise 3.0 percent in January and increase 0.8 percent in February.

Separate data on Tuesday showed household spending fell 0.3 percent in December year on year, marking the 10th straight month of declines but beating the 0.6 percent decrease projected by analysts. Household spending dropped 1.5 percent in November.

The figures reinforce the dominant market view that the Bank of Japan will hold off on expanding monetary stimulus at its meeting on Tuesday.

Japan's jobless rate was steady at 3.1 percent in December and the jobs-applicants ratio rose to 1.43 from 1.41 the previous month, data showed on Tuesday.

(Reporting by Minami Funakoshi; Editing by Chang-Ran Kim and Eric Meijer)