A leading economic index for Japan bounced higher again in June, the Conference Board said on Friday, climbing 0.4 percent.
That follows the downwardly revised 0.2 percent decline in May (originally -0.1 percent).
Large positive contributions from dwelling units started and business failures more than offset the negative contributions from stock prices and the six-month growth rate of labor productivity component. Between December 2014 and June 2015, the leading economic index contracted by 0.5 percent (about a -1.0 percent annual rate), a reversal from the increase of 1.2 percent (about a 2.4 percent annual rate) over the prior six months. However, the strengths among the leading indicators continue to be slightly more widespread than the weaknesses.
Eight of the ten components increased in June, including dwelling units started, (inverted) business failures, the new orders for machinery and construction component, the Tankan business conditions survey, the interest rate spread, real money supply, the index of overtime worked, and real operating profits.
The negative contributors this month were stock prices and the six-month growth rate of labor productivity.
The coincident index climbed 0.6 percent in June after dipping 0.2 percent in the previous month. The coincident economic index improved 0.3 percent (about a 0.6 percent annual rate) during the six months ending in June 2015, after increasing by 0.5 percent (about a 1.0 percent annual rate) over the preceding six months. The strengths among the coincident indicators have become more widespread than the weaknesses in recent months. At the same time, real GDP expanded by 3.9 percent (annual rate) in the first quarter of 2015, after expanding by 1.2 percent (annual rate) in the fourth quarter of 2014.
All four components for the coincident increased in June, including the number of employed persons, the retail, wholesale, and manufacturing sales component, industrial production, and wage and salary income.
Taken together, the recent behavior of both indexes suggests that the growth in economic activity should continue, but is unlikely to gain momentum in the short-term.
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