Japanese Economic Index Dow Shows “Pause” in Economy

Japan’s key composite index of economic indicators fell in May following a rise in the previous month, data showed Monday, prompting the government to downgrade its assessment of the nation’s economy for the first time in nine months.

The index of coincident indicators, such as industrial output, retail sales and new job offers, dropped 1.8 points from the previous month to 109.2 against the 2010 base of 100, the Cabinet Office said in a preliminary report. The government cut its basic assessment of the index from “improving” to “pausing.”

The fall largely reflected sluggish performances of auto parts wholesalers as a result of slower exports of cars. Lackluster manufacturing-linked data such as industrial output were also behind the fall in the coincident indicators, a Cabinet Office official said.

In the reporting month, the index of leading indicators, which predicts developments in the coming few months, shed 0.2 point to 106.2 for the first decline in three months.

Meanwhile, the index of lagging indicators, measuring economic performance in the recent past, gained 0.6 point for the second straight monthly increase to 125.8.

via Mainichi

Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza