TOKYO, Jan. 31 (Xinhua) -- 's industrial production increased in December from a month earlier, owing to rising output in the transport sector, the government said in a report on Wednesday.

According to the Ministry of Economy, Trade and Industry, industrial production rose 2.7 percent on month in December, following a 0.5 percent rise logged in November.

The ministry's preliminary report said the output at factories and mines stood at 106.3 against the base of 100 for 2010 on a seasonally adjusted basis.

The index of industrial shipments rose 2.7 percent to 103.9, the ministry's data showed, while the inventories' index retreated 0.4 percent to 109.4.

Based on the latest data, the ministry opted to maintain its assessment that industrial production is "picking up" in Japan.

As for the outlook for factory output here, manufactures said they expect production to drop 4.3 percent in January, however, before rebounding in February with output projections at 5.7 percent.