Finance news. My opinion.

Japanese manufacturers increased production for a fourth month in June, capping the fastest quarterly output expansion in more than half a century and helping the economy rebound from its deepest postwar recession.

Production rose 2.4 percent from May, the Trade Ministry said today in Tokyo. Output gained 8.3 percent last quarter from the first three months of 2009, the most since 1953.

Companies said they also planned to increase manufacturing in July and August to replenish inventories and meet demand spurred by more than $2 trillion in government spending worldwide. Honda Motor Co. and Nissan Motor Co. shares soared after incentives from the U.S. to China to buy fuel-efficient cars helped the automakers report earnings that beat estimates.

“You’re seeing a dramatic inventory-driven production spike,” said Richard Jerram, chief economist at Macquarie Securities Ltd. in Tokyo. “It’s a good, solid set of data; it suggests the inventory cycle is very powerful and it’s going to keep running for a few months to come.”

The yen traded at 94.97 per dollar at 11:36 a.m. in Tokyo from 95.08 before the report was published. The Nikkei 225 Stock Average rose 0.03 percent at the lunch break, and has gained 43 percent since reaching a 26-year low on March 10.

Today’s report adds to signs the deepest global recession since the Great Depression is abating. The U.S. Federal Reserve said yesterday that most of its 12 regional banks detected a slower pace of economic decline in June and July. China, South Korea and Vietnam all reported faster growth last quarter.

Honda, Nissan

Honda climbed as much as 9 percent, the most in three months, after raising its net income estimate and unexpectedly reporting quarterly profit of 7.5 billion yen ($79 million). Nissan gained as much as 8.7 percent to a nine-month high after reporting a smaller loss than analysts predicted.

The U.S., Germany and China are offering consumers credits, tax breaks and subsidies for trading in old cars for new fuel- efficient models. Japan’s own stimulus has boosted sales of environment-friendly cars like Toyota Motor Corp.’s Prius.

Manufacturers planned to boost output 1.6 percent in July and 3.3 percent in August, today’s report showed. The ministry said production is “on a recovery trend” after last month describing it as “showing signs of recovery.”

“The forecasts fuel hope that the rebound will last a bit longer than we’d thought,” said Hiroshi Shiraishi, an economist at BNP Paribas in Tokyo.

Exports Rebound

Japanese exports rose in June from May, buoyed by sales to China and the U business