Japan's Key Economic Gauge Up Again

Key gauge of Japan's current economic state stood above 50 percent boom-or-bust threshold for third consecutive month in June.

TOKYO (Kyodo) - The key gauge of the current state of Japan's economy stood above the boom-or-bust threshold of 50 percent for the third consecutive month in June, the government said Monday.
The index of coincident economic indicators came to 77.8 percent, supported by strong production-related indicators, the Cabinet Office said in a preliminary report.
The index of leading indicators, which predicts economic developments about six months down the road, stood at 80.0 percent in June, topping the 50-percent line for the first time in 12 months led by positive readings in indicators of equity and commodity markets.
A reading above 50 percent is considered a sign of economic expansion and a figure below that line is seen as a sign of contraction.
The government left unchanged its view of the current economic situation for the second month, saying the economy is ''improving recently,'' instead of ''seesawing'' as used in April, a Cabinet Office official said.
Of the 11 economic indicators comprising the coincident index for June, nine were available for the preliminary report. Of these, seven items including industrial production, shipment and retail sales showed positive readings.
The index for industrial goods shipment hit a record-high level, while that for sales by small and midsize firms reached its highest figure in the current cycle of economic expansion that began in February 2002.
The official said the index for industrial output has improved significantly and that manufacturers expect production will increase in the coming months.
But he added that manufacturers' forecast did not factor in a negative impact from the magnitude-6.8 quake that hit Niigata Prefecture on July 16.
The remaining two items—large-lot electricity use and overtime working hours—were negative in the reporting month.
Of the 12 economic indicators comprising the index of leading indicators for June, 10 were available and eight of them were positive.
The official said four of the 12 statistics had already been available for July and that they were all positive.
The index of lagging indicators, designed to measure economic performance in the recent past, came to 50.0 percent in June, after exceeding the 50-percent threshold for three months in a row, the report said.
The diffusion indexes compare the levels of various economic data for a reporting month with levels three months earlier.
More in Supply Chain