Japan’s key composite index rose in December following a fall the previous month, the government said on Friday, suggesting the country’s economy may have overcome the negative impact of the 3-percentage-point consumption tax hike to 8 percent last April.
The December index of coincident indicators, such as industrial output, retail sales and new job offers, advanced 1.5 points to 110.7 from the previous month, against the 2010 base of 100, the Cabinet Office said in a preliminary report.
The government upgraded its basic assessment of the coincident index, saying it suggests the economy is “improving.” The assessment is defined as indicating the likelihood of economic expansion.
Some analysts say the economic outlook has become more optimistic since Prime Minister Shinzo Abe announced in November that the government had decided to postpone a further consumption tax hike to 10 percent by 18 months from October 2015.
In the wake of the April 1 consumption tax increase, Japan’s economy contracted for a second straight quarter through September, with private spending and housing investment shrinking significantly.
In December, Japan’s industrial production rose 1.0 percent from a month earlier, after falling 0.5 percent in November, while the durable-goods shipment index jumped 7.1 percent following a 5.4 percent decrease in the previous month, the office said.
A pickup in shipments by small and medium-sized enterprises also helped drive up the coincident index, it said.
Many economists say the economy has already returned to a recovery track.
It grew an annualized real 3.6 percent in the three months through December, rebounding from a 1.9 percent contraction the previous quarter, according to the average of projections released last week by eight private-sector think tanks.
During the reporting month, the index of leading indicators, which predicts developments in the coming few months, climbed for the first time in three months, up 1.5 points to 105.2.
The index of lagging indicators, measuring economic performance in the recent past, marked the first decline in three months, down 2.3 points to 118.3.
In a time of both misinformation and too much information, quality journalism is more crucial than ever.
By subscribing, you can help us get the story right.