Global Leading Indicators

The Conference Board Leading Economic Index^®(LEI) for Japan decreased by 1.3 percent in December 2022 to 89.4 (2016=100), following a 1.2 percent decline in November. The LEI for Japan contracted by 3.5 percent in the six-month period ending in December 2022, following a 1.4 percent decline over the previous six months between December 2021 and June 2022.

The Conference Board Coincident Economic Index^® (CEI) for Japan remained unchanged in December 2022 at 99.6 (2016=100), following a 0.1 percent decline in November. The CEI for Japan fell by 0.7 percent over the six-month period from June to December 2022, after contracting by 0.3 percent in the previous six-month period between December 2021 and June 2022.

“The Japan LEI declined for the fourth consecutive month in December,” said Justyna Zabinska-La Monica, Senior Manager, Business Cycle Indicators, at The Conference Board. “The recent drop was fueled by widespread weaknesses among its underlying components. High inflation, paired with sluggish external demand will likely further weaken Japan’s economy. The Conference Board downgraded slightly year-over-year real GDP growth for Japan in 2023 to 1.7 from 1.8 percent, with significant deceleration ahead in 2024.”

Japan LEI continued to fall

Decline in the LEI was fueled by both non-financial and financial components

Japan LEI annual growth fell further into negative territory

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.

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