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Japanese factory output rises again

Japan's factory output rose for a sixth straight month in August, the longest unbroken expansion in 12 years.

With the giant auto industry recovering more strongly than expected, world number one Toyota Motor said it would take on 1,600 temporary workers from October - twice as many as previously planned.

Japanese car makers are ramping up their output again after idling plants and firing thousands of workers in response to a slump in demand.

That helped Japan's industrial output to rise by 1.8% in August from July, led by higher production of cars, electronics and machinery, official figures showed.

Manufacturers painted a bright picture of the outlook, predicting factory output would rise 1.1% in September and a further 2.2% in October.

In 2010 the Japanese economy will grow by 0.9%, after a brutal 6.0% contraction this year, the OECD predicted today, urging the authorities to keep up their stimulus measures.

Japan's factory output was still down 18.7% in August compared with a year earlier, reflecting a plunge in production at Japan's plants and factories since the global economic downturn began.

The recovery in output seen since March is likely to lose steam as the effect of government economic stimulus measures declines, said Daiwa Institute of Research economist Hiroshi Watanabe.