Japan Dec. Index of Leading Economic Indicators Rises to 50%
quote.bloomberg.com
Economies
02/05 00:09
Japan Dec. Index of Leading Economic Indicators Rises to 50%
By Ryo Hino
Tokyo, Feb. 5 (Bloomberg) -- Japan's index of leading economic indicators rose to
the 50 percent boom-or-bust mark in December, suggesting the economy isn't
headed for recession.
The leading index, which gauges economic activity in about six months, rose to 50
percent in December, up from 30 percent in November, the Cabinet Office said in a
preliminary report.
A reading of 50 percent means half the available components that make up the index
improved compared to three months earlier, and suggests the economy will expand.
``The business cycle is turning down but is not collapsing,'' said Yoshito Sakakibara,
senior economist at Merrill Lynch (Japan) Inc..
Increases were registered in four of the eight available components - new car
registration, floor space of housing starts, money supply and job offers.
Meanwhile, the index of coincident economic indicators also bounced back above 50
percent in December after falling short in November. The index, which measures
current conditions, posted a reading of 71.4 percent in December, up from 30.0
percent in November, the report showed.
The indexes are calculated by dividing the number of positive components by the
total, and gauges the direction the economy is headed. A reading above 50 percent
points to expansion, though isn't a measure of how much growth is in store.
The level economic activity can be seen through the composite indexes. The leading
composite index rose 0.2 percent to 102.6 in December, while the coincident index
rose 0.7 percent to 108.3, the report said. |
