Japan's vehicle production increased for the fifth straight month in January, according to the latest JAMA data.

Driven by rising domestic demand ahead of tax rises, auto production increased by 14.5% year-on-year in January to 860,803 units.

Japanese vehicle production is increasing in the first quarter of 2014 ahead of a domestic tax change planned for April.

Japan will raise its 5% sales tax to 8% in April to help pay for rising healthcare costs. The tax increase has prompted consumers to bring forward purchases of big-ticket items such as cars.

However, demand and output in Japan are expected to fall after the tax increases take effect. JAMA forecasts that vehicle sales in Japan will drop 10% to 4.85m units in 2014 as the tax increase dents consumer sentiment.