Global Leading Indicators

About the Leading Economic Index and the Coincident Economic Index:

The Leading Economic Index provides an early indication of significant turning points in the business cycle and where the economy is heading in the near term. The Coincident Economic Index provides an indication of the current state of the economy. Additional details are below.

The Conference Board Leading Economic Index^®(LEI) for Japan increased by 0.2 percent in August 2023 to 88.6 (2016=100), after a decline of 0.6 percent in July. As a result, the LEI for Japan improved by 0.6 percent in the six-month period ending in August 2023, following a 4.8 percent decline over the previous six months between August 2022 and February 2023

The Conference Board Coincident Economic Index^® (CEI) for Japan also improved slightly by 0.2 percent in August 2023 to 99.4 (2016=100), partially reversing a decrease of 0.3 percent in July. The CEI for Japan improved by 0.5 percent over the six-month period from February to August 2023, after contracting by 1.5 percent in the previous six-month period between August 2022 and February 2023.

“The Japan LEI improved in August, after declining in the previous two months. The index on a six-month basis moved into positive territory, but the annual rate remains negative. This suggests that the Japanese economy will continue to face headwinds in the near term,” said Justyna Zabinska-La Monica, Senior Manager, Business Cycle Indicators, at The Conference Board. “Most components of the Japan LEI improved in August, more than offsetting declines in overtime hours worked in manufacturing. While consumers are holding up, inflation is eating into real purchasing power of wages. Spending is supported by depleting savings, which cannot be sustained for much longer. The Conference Board forecasts year-over-year real GDP growth for Japan of 2.3 percent in 2023, with a lower reading of 1.0 percent in 2024.”

The LEI for Japan improved in August

 Last month’s improvement was driven by a majority of components

The annual growth for Japan’s LEI remains in negative territory, signaling weakening growth ahead

About The Conference Board Leading Economic Index® (LEI) for Japan

The composite economic indexes are the key elements in an analytic system designed to signal peaks and troughs in the business cycle. The indexes are constructed to summarize and reveal common turning points in the economy in a clearer and more convincing manner than any individual component. The CEI is highly correlated with real GDP. The LEI is a predictive variable that anticipates (or “leads”) turning points in the business cycle by around 4 months. Shaded areas denote recession periods or economic contractions. The dates above the shaded areas show the chronology of peaks and troughs in the business cycle.

The ten components of The Conference Board Leading Economic Index® for Japan include: Operating Profits, Dwelling Units Started, Business Failures, Index of Overtime Worked, Stock Prices (TOPIX), Six Month Growth Rate of Labor Productivity, Tankan Business Conditions Survey, Money Supply, Yield Spread, and New Orders for Machinery and Construction.

To access data, please visit: https://data-central.conference-board.org/

About The Conference Board

The Conference Board is the member-driven think tank that delivers Trusted Insights for What’s Ahead^®. Founded in 1916, we are a non-partisan, not-for-profit entity holding 501 (c) (3) tax-exempt status in the United States. www.tcb.org