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Released: Tuesday, June 12, 2012

The Conference Board Leading Economic Index®  (LEI) for Japan decreased 0.3 percent The Conference Board Coincident Economic Index®  (CEI) decreased 0.2 percent in April.

  • The Conference Board LEI for Japan fell in April following two large increases. However, there were upward revisions to the previous four months as actual data for operating profits* for the first quarter data became available. In April, stock prices, index of overtime worked, and (inverted) business failures made the largest negative contributions to the index. Between October 2011 and April 2012, the leading economic index increased by 2.5 percent (about a 5.1 percent annual rate), faster than the 1.7 percent growth (about a 3.5 percent annual rate) for the previous six months. In addition, the strengths among the leading indicators have remained widespread in recent months. 
  • The Conference Board CEI for Japan, a measure of current economic activity, also fell in April as employment and the wage and salary income components both declined. The coincident economic index increased by 1.2 percent (about a 2.5 percent annual rate) in the six-month period ending April 2012, below the increase of 4.1 percent (about a 8.3 percent annual rate) for the previous six months. However, the strengths among the coincident indicators have been very widespread in recent months. Meanwhile, real GDP increased sharply, by 4.7 percent (annual rate) in the first quarter of 2012, substantially up from the revised 0.1 percent increase (annual rate) in the fourth quarter of 2011.
  • The Conference Board LEI for Japan fell slightly in April after increasing sharply in the first quarter of the year and its six-month growth rate is faster than at the end of 2011. The LEI is still above its pre-earthquake level reached in February 2011. Meanwhile, The Conference Board CEI for Japan also declined slightly after four consecutive gains and its six-month growth remains slower than during the second half of last year. Taken together, the composite indexes and their components suggest that although the economy will continue expanding, the rapid pace of its growth is not likely to continue in the coming months.

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

With the decrease of 0.3 percent in April, The Conference Board LEI for Japan now stands at 97.4 (2004=100).  Based on revised data, this index increased 1.1 percent in March and increased 1.2 percent in February.  During the six-month span through April, the index increased 2.5 percent, and nine of the ten components advanced (diffusion index, six-month span equals 90.0 percent).

COINCIDENT INDICATORS.  Two of the four components that make up The Conference Board CEI for Japan decreased in April. The positive contributors to the index include the retail, wholesale, and manufacturing sales* component and industrial production.  Number of employed persons and wage and salary income declined in April.

With the decrease of 0.2 percent in April, The Conference Board CEI for Japan now stands at 98.7 (2004=100).  Based on revised data, this index increased 0.1 percent in March and increased 0.4 percent in February.  During the six-month span through April, the index increased 1.2 percent, and all four components advanced (diffusion index, six-month span equals 100.0 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 June 11, 2012.  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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