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Released: Thursday, April 11, 2013

The Conference Board Leading Economic Index® (LEI) for Japan increased 1.0 percent and The Conference Board Coincident Economic Index®  (CEI) increased 0.2 percent in February.

  • The Conference Board LEI for Japan rose sharply in February, with business failures (inverted), dwelling units started, and the index of overtime worked making the largest contribution to this increase. With this month’s gain, the six-month growth rate of the LEI picked up to 1.1 percent (about a 2.2 percent annual rate) between August 2012 and February 2013, up from the decline of 3.3 percent (about a -6.6 percent annual rate) during the previous six months. Additionally, the strengths among the leading indicators have become more widespread than the weaknesses in the last six months.
  • The Conference Board CEI for Japan, a measure of current economic activity, also increased in February. The coincident economic index increased by 0.2 percent (about a 0.4 percent annual rate) between August 2012 and February 2013, up from the decline of 1.3 percent (about a -2.6 percent annual rate) for the previous six months. Moreover, the strengths and weaknesses among the coincident indicators have become balanced in the last six 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 February for the third consecutive month, and its six-month growth has turned positive for the first time since May 2012. At the same time, The Conference Board CEI for Japan also increased in February, and its six-month change also moved into positive territory. Taken together, the recent improvements in both the LEI and CEI suggest that the current economic expansion is likely to continue, and that the pace of expansion may even pick up slightly in the coming months.

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

With the increase of 1.0 percent in February, The Conference Board LEI for Japan now stands at 93.8 (2004=100).  Based on revised data, this index increased 0.8 percent in January and increased 0.2 percent in December.  During the six-month span through February, the index increased 1.1 percent, and seven of the ten components advanced (diffusion index, six-month span equals 70.0 percent).

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

With the increase of 0.2 percent in February, The Conference Board CEI for Japan now stands at 96.7 (2004=100).  Based on revised data, this index increased 0.3 percent in January and was unchanged in December.  During the six-month span through February, the index increased 0.2 percent, and two of the four components advanced (diffusion index, six-month span equals 50.0 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 April 10, 2013.  Some series are estimated as noted below.

* The series in The Conference Board LEI that are based on our estimates are real operating profits, the six month growth rate of labor productivity, 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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