The key gauge of the current state of the economy topped the boom-or-bust line of 50 percent in March for the first time since December 2000, the government said Thursday in a preliminary report.
The coincident index rose to 56.3 percent, up from a revised 40 percent in February, the Cabinet Office said. A reading below 50 percent is considered a sign of economic contraction and a figure above is viewed as a sign of expansion.
“The coincident index surpassing 50 percent for the first time in 15 months can be interpreted that the Japanese economy is gradually emerging from a severe situation,” said Yoshihiko Senoo, director of the Business Statistics Department at the Cabinet Office’s Economic and Social Research Institute.
The remarks reflect a change in government assessment as Senoo had maintained for the previous six months in a row that the economy was in severe shape.
The index of leading economic indicators, a measure of economic moves about six months ahead, came to 80 percent in March, topping the 50 percent line for the third straight month. The leading index came to a revised 50 percent in February.
The lagging index, which gauges performance in the recent past, was 40 percent, up from 16.7 percent in the previous month but below 50 percent for the eighth straight month.
Of indicators making up the coincident index, those on production, shipment, overtime work hours and sales at department stores showed positive readings.
A gauge on large-lot electricity use stayed in negative territory for the third straight month, but its rate of fall slowed.
Senoo said the government expects the coincident index to remain above 50 percent in April, as the recent recovery trend in exports likely boosted production and overtime.
“Exports to the United States and Asia, including those of electronic parts, are expected to continue growing for the time being,” he said.
But domestic consumption is still weak compared with external demand, and whether the index will stay above 50 percent beyond April is not clear, he added.
The diffusion indexes of the coincident, leading and lagging indicators compare the current levels of various economic indicators with their levels three months earlier.
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