THE ECONOMY.(TO THE POINT)

Japan's Jan. production, sales up

Industrial output rose 2.1% vs. Dec., more than expected. Also, retail sales gained 2.2% vs. a year ago -- good news after weak spending was largely to blame for shrinking GDP in the Oct.-Dec. period. Economists now expect Japan to exit its latest recession in the Jan.-March period, growing 1% quarter over quarter.

** The yen rallied vs. the dollar on the economic data. The greenback fell 0.70 yen to 104.23 yen.

** Bank of Japan Gov. Toshihiko Fukui warned its ultraloose monetary policy will stay that way for some time. Short-term rates are near zero.

** Fed Gov. Mark Olson said the U.S. economy will expand at a "solid pace" as consumer spending, housing and business fixed investment stay strong. He described inflation as "well contained."

** U.S. investor optimism hit a 7-month high on confidence in the economy and return on short-term investments, UBS said. Its index rose to 82 in Feb. despite sentiment that higher energy costs are hurting returns.

** Euro zone inflation fell to 1.9% in Jan., a ...