PREVIEW-Japan industrial output expected to recover on domestic demand
* Industrial output seen up 1.8 pct in September
* Labour demand, consumer spending also likely strong
* Jobs, household spending data due 8:30 a.m. Tues (2330 GMT Mon
* Industrial output data due 8:50 a.m. Wednesday (2350 GMT Tues
* Data seen boding well for Japan's battle to end deflation
TOKYO, Oct 25 (Reuters) - Japanese industrial output is expected to have rebounded in September, fuelled by strong domestic demand and business investment, a Reuters poll showed, highlighting the strength of the economy as government policies bolster growth.
Indicators of labour demand, consumer spending and real estate investment next week are also likely to come in strong, showing that Japan is making steady progress towards beating deflation.
"Companies are going to start building up inventories to meet demand brought forward before the sales tax hike in April," said Hiroshi Miyazaki, senior economist at Mitsubishi UFJ Morgan Stanley Securities.
"They will also produce more capital goods as capital expenditure plans are strong," he said.
Industrial production is forecast to have risen 1.8 percent in September, according to the Reuters poll, following a 0.9 percent decline in August. The data is due at 8:50 a.m. on Wednesday in Tokyo (2350 GMT Tuesday).
Manufacturers, surveyed by the Ministry of Economy, Trade and Industry, will also give forecasts for production in October and November, which will help measure how quickly output will grow as the year-end approaches.
The jobs-to-applicants ratio, a measure of labour demand, is expected to have risen to a five-year high of 0.96 in September from 0.95 in the previous month, the survey also showed.
Growing demand for workers is a positive sign in Japan's battle to end 15 years of deflation as this should push wages higher and spur consumption.
Household spending in September likely rose 0.5 percent from a year earlier, recovering from a 1.6 percent slide in August, the poll showed. Retail sales are forecast to have risen 1.9 percent year-on-year in September, up for the second straight month in a sign of solid consumer sentiment.
The employment, household spending and retail statistics are all scheduled for release on Tuesday morning in Tokyo.
Japan's property market has been another bright spot as people rush to buy homes and apartments before an increase in the sales tax in April to 8 percent from 5 percent.
Data due at 2 p.m. (0500 GMT) on Thursday is expected to show that housing starts jumped an annual 12.2 percent in September after a 12.0 percent rise in August.
Japan's economic growth has outpaced its Group of 7 rich-country peers so far this year as stock market gains stoked personal consumption, prompting some companies in the service sector to expand payrolls.
There is also growing evidence that companies are more willing to raise wages and invest in factories and equipment, two steps that many government officials say are necessary for Japan to end deflation and shift its economy into a higher gear.
(Editing by Chris Gallagher)