Global Leading Indicators

Next month’s release of the composite economic indexes will incorporate annual benchmark revisions which bring them up-to-date with revisions in the source data. These revisions do not change the cyclical properties of the indexes. The indexes are updated throughout the year, but only for the previous six months. Data revisions that fall outside of the moving six-month window are not incorporated until the benchmark revision is made and the entire histories of the indexes are recomputed. As a result, the revised indexes, in levels and month-on-month changes, will not be directly comparable to those issued prior to the benchmark revision.

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The Conference Board Leading Economic Index^®(LEI) for Japan decreased by 0.1 percent in October 2022 to 92.3 (2016=100), following a 0.6 percent decline in September. The LEI for Japan contracted by 0.4 percent in the six-month period ending in October 2022, following a 0.9 percent decline over the previous six months between October 2021 and April 2022.

The Conference Board Coincident Economic Index^® (CEI) for Japan declined by 0.5 percent in October 2022 to 99.3 (2016=100), following no change in September. The CEI for Japan declined by 0.3 percent over the six-month period from April to October 2022, after an increase of 0.6 percent in the previous six-month period between October 2021 and April 2022.

“The Japan declined further in October, after downwardly revised figures in September,” said Justyna Zabinska-La Monica, Senior Manager, Business Cycle Indicators, at The Conference Board. “Negative contributions from overtime worked in manufacturing, real money supply, and business failures drove the October dip in the LEI. GDP for Japan contracted in the third quarter due to a surge in imports, but internal demand has been strong and is helping support economic growth. However, a softer external environment will present downside risk to the growth outlook in the near term. The Conference Board forecast for real GDP growth in Japan was downgraded to 1.3 from 1.6 percent for 2022 and growth will remain moderate in 2023.”

Japan LEI continued to decline in October

Recent downward trajectory of the LEI is due to worsening real money supply, overtime worked in manufacturing and housing construction

Trajectory of the Japan LEI points to subdued growth outlook in the near term

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

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