Loading
Search
▼ Japan's Coincident Index Suggests Economy At "Turning Point"
- Category:Other
TOKYO (Reuters): Japan's coincident indicator index fell for a third straight month in January, prompting the government to downgrade its outlook on Thursday as the index indicated the economy could have reached the peak of its long-term business cycle.
Calculated from a range of data, including factory output, employment and retail sales, the index along with other data will be assessed retrospectively by a government panel of economists and academics to determine where the economy is in the cycle.
The index fell 2.7 points in January from December, the biggest fall in a year, preliminary data released by the Cabinet Office showed.
As a result, the government cut its assessment of the index for the first time in four months to say the economy was "at turning point toward a downgrade."
The poor showing in January made it unclear whether the economy will be able to post its longest run of growth in the post-war period.
Growth, in any case, has been painfully slow despite Prime Minister Shinzo Abe's ongoing effort to break the economy out of a long deflationary phase, and analysts reckon that if there was any growth last year it was minimal.
The government's downgrade comes as Japan's export-reliant economy faces uncertainty over global trade tensions and slowing Asian demand.
The index for leading economic indicators, which is a gauge of the economy a few months ahead and is compiled using data like job offers and consumer sentiment, declined 1.3 points in January from December.
"We think the economy was not recovering last year but it was at a standstill," said Takeshi Minami, chief economist at Norinchukin Research Institute.
"There is a possibility that the economy enters recession within this year if falls in exports become prominent."
Calculated from a range of data, including factory output, employment and retail sales, the index along with other data will be assessed retrospectively by a government panel of economists and academics to determine where the economy is in the cycle.
The index fell 2.7 points in January from December, the biggest fall in a year, preliminary data released by the Cabinet Office showed.
As a result, the government cut its assessment of the index for the first time in four months to say the economy was "at turning point toward a downgrade."
The poor showing in January made it unclear whether the economy will be able to post its longest run of growth in the post-war period.
Growth, in any case, has been painfully slow despite Prime Minister Shinzo Abe's ongoing effort to break the economy out of a long deflationary phase, and analysts reckon that if there was any growth last year it was minimal.
The government's downgrade comes as Japan's export-reliant economy faces uncertainty over global trade tensions and slowing Asian demand.
The index for leading economic indicators, which is a gauge of the economy a few months ahead and is compiled using data like job offers and consumer sentiment, declined 1.3 points in January from December.
"We think the economy was not recovering last year but it was at a standstill," said Takeshi Minami, chief economist at Norinchukin Research Institute.
"There is a possibility that the economy enters recession within this year if falls in exports become prominent."
- March 9, 2019
- Comment (0)
- Trackback(0)