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Benchmark Revisions - November 2006

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Released: Thursday, August 5, 2010

The Conference Board Leading Economic Index®  (LEI) for Japan decreased 1.8 percent The Conference Board Coincident Economic Index®  (CEI) remained unchanged in June.

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  • The Conference Board LEI for Japan fell sharply in June, decreasing for the third straight month. New orders for machinery and construction continued to decline; the six-month growth rate of labor productivity and stock prices also fell sharply in June. With this month’s decline, the six-month growth rate in the leading economic index continued to slow -- to 3.1 percent (a 6.3 percent annual rate) from December 2009 to June 2010, substantially down from 17.5 percent (about a 38.1 percent annual rate) for the previous six months. In addition, the strengths among the leading indicators have become less widespread in recent months. 
  • The Conference Board CEI for Japan was unchanged in June, following a small decline in May. Except for industrial production, all the coincident indicators advanced this month. The six-month growth rate of the coincident economic index has slowed to 1.2 percent (a 2.5 percent annual rate) for the period through June 2010, down from 3.0 percent (about a 6.0 percent annual rate) for the previous six months. At the same time, real GDP increased by 5.0 percent (annual rate) in the first quarter of 2010, up from 4.6 percent (annual rate) in the fourth quarter of 2009.
  • The Conference Board LEI for Japan has declined for three consecutive months now, and its six-month growth rate has continued to slow. In addition, growth in The Conference Board CEI for Japan has also slowed in recent months. Taken together, the behavior of the composite indexes suggests that the economy will continue to recover, but the pace of the recovery will likely be more modest in the near term.

LEADING INDICATORS.  Five of the ten components that make up The Conference Board LEI for Japan increased in June.  The positive contributors to the index – in order from the largest positive contributor to the smallest – include the Tankan business conditions survey, the (inverted) business failures, interest rate spread, dwelling units started, and real money supply.  The negative contributors – in order from the largest negative contributor to the smallest – include the new orders for machinery and construction component*, the six-month growth rate of labor productivity, stock prices, and the index of overtime worked. Real operating profits* were unchanged.

With the decrease of 1.8 percent in June, The Conference Board LEI for Japan now stands at 100.3 (2004=100).  Based on revised data, this index decreased 0.7 percent in May and decreased 0.1 percent in April.  During the six-month span through June, the index increased 3.1 percent, and six of the ten components advanced (diffusion index, six-month span equals 65.0 percent).

COINCIDENT INDICATORS.  Three of the four components that make up The Conference Board CEI for Japan increased in June. The positive contributors to the index – in order from the largest positive contributor to the smallest – include the real retail, wholesale, and manufacturing sales* component, wage and salary income, and number of employed persons.  Industrial production declined in June.

Holding steady in June, The Conference Board CEI for Japan now stands at 98.4(2004=100).  Based on revised data, this index decreased 0.3 percent in May and increased 0.2 percent in April.  During the six-month span through June, the index increased 1.2 percent, and three of the four components advanced (diffusion index, six-month span equals 75.0 percent).

DATA AVAILABILITY AND NOTES.  The data series used to compute The Conference Board Leading Economic Index®  (LEI) for Japan and The Conference Board Coincident Economic Index® (CEI) for Japan reported in this release are those available “as of” 5:00 P.M. ET August 4, 2010.  Some series are estimated as noted below.

* The series in The Conference Board LEI that are based on our estimates are real operating profits and new orders for machinery.  The series in The Conference Board CEI that is based on our estimates is real manufacturing sales.

THESE DATA ARE FOR ANALYSIS PURPOSES ONLY. NOT FOR REDISTRIBUTION, PUBLISHING, DATABASING, OR PUBLIC POSTING WITHOUT EXPRESS WRITTEN PERMISSION.

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