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Released: Tuesday, July 9, 2013

The Conference Board Leading Economic Index® (LEI) for Japan increased 0.8 percent and The Conference Board Coincident Economic Index®  (CEI) increased 0.1 percent in May.

  • The Conference Board LEI for Japan continued to increase in May, with the six-month growth rate of labor productivity, the Tankan business conditions survey, and dwelling units started making the largest positive contributions to the index. With this month’s gain, the six-month growth rate of the LEI picked up to 7.2 percent (about a 14.9 percent annual rate) between November 2012 and May 2013, sharply up from the decline of 4.0 percent (about a -7.8 percent annual rate) during the previous six months. Moreover, the strengths among the leading indicators have been very widespread, with all leading indicators improving over the last six months.
  • The Conference Board CEI for Japan, a measure of current economic activity, increased slightly in May. With this month’s gain, between November 2012 and May 2013 the CEI increased 0.7 percent (about a 1.5 percent annual rate), a reversal from the decline of 0.6 percent (about a -1.3 percent annual rate) for the previous six months. In addition, the strengths among the coincident indicators have remained very widespread in recent months. Meanwhile, Japan’s real GDP grew 4.1 percent (annual rate) in the first quarter of 2013, up from the 1.2 percent (annual rate) in the fourth quarter of 2012.  
  • The Conference Board LEI for Japan has been increasing in the last six months. As a result, the growth of the LEI has picked up sharply. At the same time, the rising trend in The Conference Board CEI for Japan has continued through May this year. Taken together, the continued improvements in both the LEI and CEI suggest that the economy is likely to continue expanding at the current rate in the coming months.

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

With the increase of 0.8 percent in May, The Conference Board LEI for Japan now stands at 98.6 (2004=100).  Based on revised data, this index increased 0.5 percent in April and increased 2.6 percent in March.  During the six-month span through May, the index increased 7.2 percent, and all ten components advanced (diffusion index, six-month span equals 100.0 percent).

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

With the increase of 0.1 percent in May, The Conference Board CEI for Japan now stands at 96.9 (2004=100).  Based on revised data, this index increased 0.2 percent in April and declined 0.1 percent in March.  During the six-month span through May, the index increased 0.7 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” 10:00 A.M. ET July 8, 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 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.

Global Indicators

StraightTalk®

Straight Talk November 2013

StraightTalk® Global Economic Outlook 2014: Time to realize the opportunities for growth

From the Chief Economist

U.S. growth continues at moderate pace with momentum beginning to lose some steam

GDP is projected to grow by 2.0 percent in 2014 with the second half of this year revised lower from an average of a 2.8 percent pace to about 2.5 percent pace.

Read the article
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