Official figures show that Japanese factory output jumped by the most in almost 60 years in May as manufacturers restored supply chains damaged by the massive earthquake and tsunami in March.
Manufacturers, however, forecast smaller gains in output in coming months as they adjust production schedules to cope with possible electricity shortages in the summer.
Industrial output rose 5.7% in May following a 1.6% gain in April, the Ministry of Economy, Trade and Industry said. It was the second-biggest increase on record after a 7.9% rise in March 1953.
The rebound in output, coming after encouraging signs of improvement in exports and retail sales, lends further support to the Bank of Japan's view that the economy will recover by the end of this year, reducing the need for additional monetary easing.
The BOJ is expected to hold off on easing policy further at its rate review this month unless the Greek debt crisis triggers financial market turmoil severe enough to threaten Japan's outlook for a moderate recovery.
Car makers led the overall increase with output of transport machinery up a hefty 36.4% as they quickly mended supply chains hit by the quake. But output of chip and other electronic parts fell 0.6% in a sign that the recovery was still patchy.
Manufacturers surveyed by the ministry expect output to rise 5.3% in June but edge up only 0.5% in July.
Some companies may have front-loaded production due to the prospect of a power crunch this summer, when utilities will ask companies and households to cut power use to avoid black-outs.
But economists say the summer power shortage is unlikely to be serious enough to derail an economic recovery and agree with the BOJ that supply constraints will ease by September.
Japan's economy is expected to grow 1% in the third quarter after contracting for three consecutive quarters and suffering its second recession in three years.
