Japan’s index of coincident economic indicators came to a preliminary 85.7 percent in July, the 15th straight month it has remained above the boom-or-bust threshold of 50 percent, the Economic Planning Agency announced Wednesday.
The coincident index gauges the current state of the economy.
The EPA considers an index reading above 50 percent for a period of three straight months to be a sign of economic expansion.
The index stood at a preliminary 60 percent in April, 70 percent in May and 80 percent in June.
An EPA official said the upward trend in production prompted the coincident index to advance further in July, adding that the recent recovery in job-related indicators also contributed to the latest rise.
“Looking at the coincident index alone, we can say that Japan’s economy remains on a recovery track,” the official told reporters.
The EPA also said the index of leading economic indicators came to 57.1 percent in July, keeping it above the 50 percent line for two consecutive months.
The index was 30 percent in April, 40 percent in May and 55 percent in June.
The agency takes a reading above 50 percent in the leading index as auguring an economic expansion six months down the road, and a level below 50 percent as heralding a contraction.
The lagging index, which gauges economic performance in the recent past, was 16.7 percent in the latest month, slipping below the 50 percent mark during the previous month.
The diffusion indexes of the coincident, leading and lagging indicators compare the current levels of various economic indicators with their levels three months earlier.
Among the already available coincident index components for July, output, electricity consumption by large-lot users, overtime hours, investment goods shipments, wholesalers’ sales and the ratio of job offers to job seekers showed positive readings.
As for the leading index components, the inventory-to-sales ratio associated with goods for final demand, fresh job offers, total floor space of new housing starts and the Nikkei commodity index were in the plus column.
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