HIGHLIGHTS-Japan industrial output up but govt downgrades view

TOKYO, Jan 30 (Reuters) - Japan's industrial output rose 1.4 percent in December from a month earlier, falling short of a median market forecast for a 2.0 percent increase.

Following are key points on the data.

-- For a table on industrial output, click [nT97595]

-- For economists' reactions, click [ID:nT105371]

-- Manufacturers' output, the core component of production, is expected to fall 0.4 percent in January and a further 2.2 percent in February.

-- In December, production rose thanks to firm output of electronic parts and devices, which are often produced for Asia-bound exports. Strong production of general machinery and plastic products also helped.

-- The index for industrial output in December stood at 111.9, the second-highest under the current calculation method that traces back to January 1998 and maching the figure for August. The index hit a record high of 112.2 in October.

-- The Ministry of Economy, Trade and Industry, which releases the data, downgraded its assessment on industrial production, saying that output was in a flat trend. The ministry last downgraded its view on output when it released data for last May.

-- Previously, METI said output was on a moderate rising trend, an assessment it had reiterated since its data for last August.

-- A METI official said the downgrade was partly due to a weak outlook for manufacturers' output, adding that it was not very common for the government to downgrade its view when issuing positive data for a given month.

-- Industrial output rose 1.3 percent in October-December from the previous quarter, marking the third straight quarter of increase. In 2007, it rose 2.7 percent.

-- Industrial production rose 0.7 percent in December from a year earlier, marking the 29th straight month of increase.

-- A breakdown of manufacturers' forecasts showed that electronic parts and devices makers see output rising 0.1 percent in January but falling 2.3 percent in February. A METI official said the expected slowdown is partly due to falling prices of those parts and devices despite strong demand.

-- The official said the ministry would monitor the impact on industrial production of fragile markets, high oil prices and tighter building rules, which have dampened Japanese housing investment since the middle of last year.

-- But the official said production of construction-related items rose slightly in December, showing a sign of improvement, and he did not expect it to fall sharply from now on. But he added: "It is like you are in a traffic jam on a long highway." (Reporting by Yoko Nishikawa; Editing by Hugh Lawson)