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Benchmark Revisions - November 2006

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Released: Tuesday, August 13, 2013

The Conference Board Leading Economic Index® (LEI) for Japan decreased 0.5 percent and The Conference Board Coincident Economic Index® (CEI) decreased 0.6 percent in June.

  • The Conference Board LEI for Japan fell in June following six consecutive gains. New orders for machinery and construction, the index of overtime worked, and dwelling units started made large negative contributions to the index. Despite this month’s decline, the LEI rose 6.2 percent (about a 12.7 percent annual rate) in the first half of 2013, sharply up from the decline of 1.9 percent (about a -3.8 percent annual rate) during the previous six months. Moreover, the strengths among the leading indicators have been very widespread, with all leading indicators advancing in recent months.
  • The Conference Board CEI for Japan, a measure of current economic activity, also fell in June. Between December 2012 and June 2013, the CEI increased 0.4 percent (about a 0.8 percent annual rate), a reversal from the decline of 0.8 percent (about a -1.6 percent annual rate) during the previous six months. In addition, the strengths among the coincident indicators have remained more widespread than the weaknesses in recent months. Meanwhile, Japan’s real GDP grew 2.6 percent (annual rate) in the second quarter of 2013, down from 3.8 percent (annual rate) in the first quarter.  
  • The Conference Board LEI for Japan fell for the first time since October of last year. Nevertheless, the six-month growth rate in the LEI remains near a three-year high. At the same time, The Conference Board CEI for Japan also declined in June, but its six-month growth rate remains positive. Despite the declines in both the LEI and CEI in June, it is much too early to conclude that Japan’s economic expansion is losing momentum. In fact, the widespread strength in the indexes during the first half of the year suggests the economy is likely to continue expanding in the coming months.

LEADING INDICATORS. Six 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 – were business failures (inverted), the Tankan business conditions survey, interest rate spread, six month growth rate of labor productivity, real money supply, and real operating profits*. The negative contributors – in order from the largest negative contributor to the smallest – were new orders for machinery and construction*, the index of overtime worked, dwelling units started, and stock prices.    

With the decrease of 0.5 percent in June, The Conference Board LEI for Japan now stands at 98.1 (2004=100). Based on revised data, this index increased 0.8 percent in May and increased 0.5 percent in April. During the six-month span through June, the index increased 6.2 percent, and all ten components advanced (diffusion index, six-month span equals 100.0 percent).

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

With the decrease of 0.6 percent in June, The Conference Board CEI for Japan now stands at 96.5 (2004=100). Based on revised data, this index increased 0.3 percent in May and increased 0.2 percent in April  During the six-month span through June, the index increased 0.4 percent, and two of the four components advanced (diffusion index, six-month span equals 62.5 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 12, 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.

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