Reuters quoted JFE Holdings Inc, Japan's No.2 steelmaker, as saying that it plans to boost its crude steel output in the fiscal year to March 2014 to the highest level in 6 years to meet strong demand for automobiles and construction in Japan and for rising exports.

The bullish forecast comes as a sign that PM Mr Shinzo Abe push to end 2 decades of economic stagnation with a mix of monetary easing and fiscal expansion is bearing fruit.

Mr Shinichi Okada executive vice president of JFE said that "Steel demand for civil engineering, construction and automobiles is on the rise. Overall, economic sentiment is improving. In addition, our export competitiveness has gained ground thanks to the weaker yen."

Exports by Japanese steelmakers are recovering on the back of the yen's fall against the US dollar as a result of the so-called "Abenomics" economic stimulus program of hyper-easy monetary policy, government spending and economic reform.

JFE forecast its crude steel output on a parent basis will climb by 1 million tonnes, or 4%, from a year ago to 29 million tonnes in 2013-14, the highest since 2007-08, pre-Lehman shock, when its output marked a record high of 30.5 million tonnes.

The steelmaker also expects a rise in prices of its steel products despite sluggish Asian markets hit by excess supply from Chinese mills. JFE forecast prices of its steel products to rise to JPY 75,000 per tonne on average in the April to September period, 10% higher than JPY 68,400 in the previous six months. Mr Okada said that "Our product prices are expected to move higher in Japan as we have been asking automakers and other manufacturers to shoulder rising import costs of raw materials."