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Economy in Brief

Japan’s Economy Watcher Index Measures Sink Sharply
by Robert Brusca January 11, 2008

The Economy watcher indices and the Teikoku indices are all at relative low points in their respective ranges. The headline economy watchers index is in the bottom 5% of its five year range. Still Japanese authorities say that the virtuous circle is intact (some circle). The Economy Watchers’ employment index is at a five year low. The future index from the Economy Watchers complex is in the bottom 1.5 percentile of its five year range. Surely this can’t be good.

We can add to this the finding in the November US trade report that real non petroleum US exports growth has turned negative over three months. Surely the rest of the world economy is slowing down and slumping US exports – despite their competitiveness- is one sign. These results from Japan are just another piece of the puzzle that helps to explain US export weakness despite a huge decline in the dollar exchange rate (although it’s not so weak vs the yen).

The Teikoku sector indices echo the Economy-Watcher findings. The manufacturing, retail and wholesale sector indices are on five year lows. Construction is in the bottom 16% of its range. Services are ‘relatively strong’ holding to the bottom 20% of their range…

Japan is still slowing and expectations of the Economy Watchers do NOT see a turning here soon. Results still seem to be worse than what the government wants to admit.

Key Japanese surveys
  Raw readings of each survey Percent of 5Yr range*
  Dec-07 Nov-07 Oct-07 Sep-07 Dec-07 Nov-07 Oct-07
Economy Watchers 36.6 38.8 41.5 42.9 5.0% 15.1% 27.5%
Employment 37.5 41.9 43.8 48.8 0.0% 14.7% 21.5%
Future 37.0 38.8 43.1 46.0 1.5% 10.6% 32.2%
NTC Manufacturing 52.3 50.8 49.5 49.8 47.3% 30.2% 15.5%
Econ Trends (Teikoku'/50 neutral/weighted diffusion)
Manufacturing 40.8 41.7 42.4 43.8 0.0% 9.7% 18.9%
Retail 34.2 34.4 37.2 37.7 0.0% 0.0% 17.1%
Wholesale 37.0 38.3 39.1 40.2 0.0% 0.0% 6.3%
Services 43.5 45.0 45.6 46.6 20.1% 36.4% 42.7%
Construction 32.0 32.6 34.7 36.8 16.4% 22.8% 43.8%
100 is high; Zero is low
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