Japan out of recession with 2.2% annualized growth

Japan emerges from recession with 2.2% annualized growth in the last quarter of 2014.

Inflation stabilizes at 2.4% and is likely to be met with Bank of Japan inaction.

Strong industrial production resulted in equity rally, but further caution warranted

In an early encouraging sign, Japan's industrial production in January 2015 surged to 4.0% over market expectations of 2.9% and December 2014 growth of just 0.8%.

This expansion is expected to carry on to February and March 2015 which is mainly attributed to foreign demand instead of domestic demand for Japan at this stage.

The Japanese equity market took this positively together with the fact that Japan is officially out of recession