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As reported by Reuters, Japanese manufacturing output grew at its fastest pace since late 2015, a welcome sign for firms and manufacturers who continue to face down significant headwinds from trade frictions.

Key quotes

Economists expect factory output to rebound this quarter as supply constraints caused by natural disasters that crimped production and physical distribution taper off, paving the way for a recovery from the third-quarter contraction.

The 2.9 percent rise in output handily beat a median market forecast of a 1.2 percent increase, and followed a revised 0.4 percent drop in the previous month. It was the fastest month-on-month gain since January 2015.

Still, slowing global demand and the intensifying U.S.-China trade war could threaten global trade and growth in the coming months, making Japan’s exports and capex vulnerable.