(Corrects POSCO's results in last paragraph)
TOKYO, July 26 (Reuters) - JFE Holdings Inc, Japan's No.2 steelmaker, said on Friday it plans to boost its crude steel output in the fiscal year to March 2014 to the highest level in six years to meet strong demand for automobiles and construction in Japan and for rising exports.
The bullish forecast comes as a sign that Prime Minister Shinzo Abe's push to end two decades of economic stagnation with a mix of monetary easing and fiscal expansion is bearing fruit.
"Steel demand for civil engineering, construction and automobiles is on the rise. Overall, economic sentiment is improving," JFE executive vice president Shinichi Okada told a news conference. "In addition, our export competitiveness has gained ground thanks to the weaker yen," he added.
Exports by Japanese steelmakers are recovering on the back of the yen's fall against the U.S. dollar as a result of the so-called "Abenomics" economic stimulus programme 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 four percent, 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 75,000 yen ($750) per tonne on average in the April-September period, 10 percent higher than 68,400 yen in the previous six months.
"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," Okada said.
Earlier this week, the Nikkei reported that Nippon Steel & Sumitomo Metal Corp and Toyota Motor Corp have agreed to raise steel-sheet prices by about 10 percent for April-September.
JFE, which ranks behind only Nippon Steel in Japan, reported its recurring profit more than tripled to 35.2 billion yen in the April-to-June quarter from 9.9 billion yen a year ago, helped in large part by cost cuts and appraisal profit on its inventories.
It forecast 170 billion yen in recurring profit, pre-tax and before one-off items, in the year to March 2014, more than triple the 52 billion yen a year ago, although it is below a consensus estimate of 221 billion in a poll of 17 analysts in Thomson Reuters I/B/E/S.
On Thursday, South Korean steelmaker POSCO said its operating profit dropped 36 percent to 703 billion won ($629.9 million) on a parent basis in the April to June quarter from a year earlier.
($1 = 99.6200 Japanese yen)
($1 = 1,116.10 Korean won) (Reporting by Yuka Obayashi)