ID :
15152
Wed, 08/06/2008 - 19:23
Auther :
Shortlink :
https://oananews.org//node/15152
The shortlink copeid
Key gauge shows Japan`s economy worsening
TOKYO, Aug. 6 Kyodo - The key gauge of the current state of Japan's economy fell 1.6 points in June from the previous month, the government said Wednesday while downgrading its assessment of the economy to ''worsening.''
The composite index of coincident economic indicators stood at 101.7 against
the 2005 base of 100, down from 103.3 in May on weak readings related to
industrial production, the Cabinet Office said in a preliminary report.
The office lowered its assessment upheld in April and May that ''a change in
the phase of the economy may have taken place,'' so as to show tentatively that
the current cycle of economic expansion beginning in February 2002 may have
ended.
The change in the evaluation follows rules set by the office when it set the
composite index, or CI, as the mainstay gauge starting from the April survey,
instead of the diffusion index, or DI.
The CI is more helpful in measuring the degree and pace of change in each
indicator than the DI, which only shows the direction of improvement or
deterioration in the economy, according to the office.
The rules say the expression ''worsening'' will be adopted when the index's
moving average over the past three months logs declines for more than three
months in a row.
In June, the index's three-month moving average for coincident indicators stood
at 102.2, down 0.24 point from May for the fourth monthly fall.
The drop in the index of coincident indicators reflects a larger-than-expected
seasonally adjusted fall of 2.0 percent from the previous month in the
country's industrial production in June.
Manufacturers predict that their output will decrease 0.2 percent in July and
0.6 percent in August from the previous month. The outcome is expected to
influence the movements of the coincident index, a Cabinet Office official
said.
In the reporting month, the index of leading indicators, which predicts
developments over several months, slipped 1.7 points from May to 91.2.
The index of lagging indicators, which measures economic performance in the
recent past, was down 1.1 points to 102.3.
The current economic boom in Japan is believed to be the longest in the postwar
era, surpassing the previous record known as the ''Izanagi'' boom that spanned
57 months between November 1965 and July 1970.
The peaks and troughs of the Japanese economy are officially determined by the
Working Group of Indexes of Business Conditions, composed of academic experts,
based on the readings of economic indicators released monthly by the Cabinet
Office.
The next working group meeting is scheduled in December, the Cabinet Office
official said. The formal decision is usually made about a year after the
estimated tipping point of the phase.
The official added that the government will announce its official economic
assessment in its monthly report. The upcoming August report due out Thursday
will likely signal that the nation's economy has entered into a downturn,
according to government sources.
The composite index of coincident economic indicators stood at 101.7 against
the 2005 base of 100, down from 103.3 in May on weak readings related to
industrial production, the Cabinet Office said in a preliminary report.
The office lowered its assessment upheld in April and May that ''a change in
the phase of the economy may have taken place,'' so as to show tentatively that
the current cycle of economic expansion beginning in February 2002 may have
ended.
The change in the evaluation follows rules set by the office when it set the
composite index, or CI, as the mainstay gauge starting from the April survey,
instead of the diffusion index, or DI.
The CI is more helpful in measuring the degree and pace of change in each
indicator than the DI, which only shows the direction of improvement or
deterioration in the economy, according to the office.
The rules say the expression ''worsening'' will be adopted when the index's
moving average over the past three months logs declines for more than three
months in a row.
In June, the index's three-month moving average for coincident indicators stood
at 102.2, down 0.24 point from May for the fourth monthly fall.
The drop in the index of coincident indicators reflects a larger-than-expected
seasonally adjusted fall of 2.0 percent from the previous month in the
country's industrial production in June.
Manufacturers predict that their output will decrease 0.2 percent in July and
0.6 percent in August from the previous month. The outcome is expected to
influence the movements of the coincident index, a Cabinet Office official
said.
In the reporting month, the index of leading indicators, which predicts
developments over several months, slipped 1.7 points from May to 91.2.
The index of lagging indicators, which measures economic performance in the
recent past, was down 1.1 points to 102.3.
The current economic boom in Japan is believed to be the longest in the postwar
era, surpassing the previous record known as the ''Izanagi'' boom that spanned
57 months between November 1965 and July 1970.
The peaks and troughs of the Japanese economy are officially determined by the
Working Group of Indexes of Business Conditions, composed of academic experts,
based on the readings of economic indicators released monthly by the Cabinet
Office.
The next working group meeting is scheduled in December, the Cabinet Office
official said. The formal decision is usually made about a year after the
estimated tipping point of the phase.
The official added that the government will announce its official economic
assessment in its monthly report. The upcoming August report due out Thursday
will likely signal that the nation's economy has entered into a downturn,
according to government sources.
