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Released: Tuesday, March 12, 2013

The Conference Board Leading Economic Index®  (LEI) for Japan increased 0.7 percent and The Conference Board Coincident Economic Index®  (CEI) increased 0.5 percent in January.

  • The Conference Board LEI for Japan increased for the second straight month in January after eight consecutive declines. Large positive contributions from business failures (inverted), stock prices, and the index of overtime worked more than offset negative contributors from the Tankan business conditions index and dwelling units started. Between July 2012 and January 2013, the LEI fell by 0.7 percent (about a -1.5 percent annual rate), a moderate improvement from the decline of 1.5 percent (about a -2.9 percent annual rate) between January and July 2012. Additionally, the strengths and weaknesses among the leading indicators have remained balanced in the last six months.
  • The Conference Board CEI for Japan, a measure of current economic activity, also increased in January. The coincident economic index declined by 0.1 percent (about a -0.2 percent annual rate) during the six-month period ending January 2013, up from the decline of 0.7 percent (about a -1.4 percent annual rate) for the previous six months. However, the weaknesses among the coincident indicators have remained very widespread in recent months. Meanwhile, Japan’s real GDP increased by 0.2 percent (annual rate) in the fourth quarter of 2012, up from the contraction of 3.7 percent (annual rate) in the third quarter of the year.  
  • The Conference Board LEI for Japan increased in January after a small gain in December.  Although its six-month growth rate remains negative, the decline has slowed throughout most of 2012. At the same time, The Conference Board CEI for Japan increased in January after declining for nine of the last twelve months. Moreover, its six-month change, although still slightly negative, has improved. Although it is too early to conclude that economic activity will improve rapidly in the near term, the recent gains in both LEI and CEI suggest the current economic weakness could be easing soon.

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

With the increase of 0.7 percent in January, The Conference Board LEI for Japan now stands at 92.7 (2004=100). Based on revised data, this index increased 0.2 percent in December and decreased 0.1 percent in November. During the six-month span through January, the index decreased 0.7 percent, and five of the ten components advanced (diffusion index, six-month span equals 50.0 percent).

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

With the increase of 0.5 percent in January, The Conference Board CEI for Japan now stands at 96.6 (2004=100). Based on revised data, this index decreased 0.1 percent in December and decreased 0.2 percent in November. During the six-month span through January, the index decreased 0.1 percent, and one of the four components advanced (diffusion index, six-month span equals 25.0 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 March 11, 2013.  Some series are estimated as noted below.

* 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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