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 decreased by 0.7 percent in July 2023 to 88.4 (2016=100), after a decline of 0.3 percent in June. The LEI for Japan contracted by 0.5 percent in the six-month period ending in July 2023, following a 3.8 percent decline over the previous six months between July 2022 and January 2023.

The Conference Board Coincident Economic Index^® (CEI) for Japan declined by 0.3 percent in July 2023 to 99.2 (2016=100), reversing an increase of 0.3 percent in June. The CEI for Japan improved by 0.5 percent over the six-month period from January to July 2023, after contracting by 1.4 percent in the previous six-month period between July 2022 and January 2023.

“The LEI for Japan declined in July, for a second consecutive month, but with upward revisions for April and May” said Justyna Zabinska-La Monica, Senior Manager, Business Cycle Indicators, at The Conference Board. “The recent decline continues to be driven by non-financial (real economy) components of the LEI. Half of the ten components contributed negatively to the index, and more than offset positive contributions from underlying data like the Tankan Business Conditions, yield spread, and stock prices. The most recently revised downward reading for Q2 GDP from 6 to 4.8 percent (annual rate) revealed weaker capital investment and personal consumption. With still elevated prices domestically and deteriorating external demand, second half growth will most likely weaken. The Conference Board forecasts year-over-year real GDP growth for Japan at 2.3 percent in 2023, with a lower reading of 1.0 percent in 2024.”

The LEI for Japan declines further in July

Last month’s decline was driven by real economy components 

The annual growth for Japan LEI continues to be in negative territory, signaling headwinds to 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