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Economy in Brief

Japan In The Data News
by Louise Curley   February 28, 2011

Japan's Ministry of Economy, Trade and Industry (METI) issued a number press releases today, detailing Japan's Industrial Production, Industry Shipments and Inventories, and Retail Trade. And Markit Economics released its purchasing managers' survey for Japan.

Japan's index of Industrial Production rose 2.4% in January to 97.1 (2005=100) from 94.8 in December. Although this was below expectations, it represented the third month of advance. Moreover METI is forecasting a slight increase in production in February of 0.1% instead of a 1.2% decline forecasted last month. The Ministry is also forecasting that March industrial production will see an increase of 1.9%. Markit's Purchasing Manager Survey for February, at 52.86 is the second month that the index is above the 50 mark. An index above 50 indicates the economy is expanding. The index and the 50 mark are shown in the first chart.

The index of Manufacturer's shipments had been rising faster than the index of production in recent months, but in January the index of production rose faster than that of shipments, as can be seen in the second chart, so that the index of inventories rose almost 5% from 96.4 in December to 100,9 in January. As a result, the index of Inventory/Sales increased 0.74% for the month to 109.3 from 108.5 in December. This is above the long term average of 103.6 but well below the peak of 154.6, reached in February 2009.

Japanese retail sales data are available in index form on a seasonally adjusted basis as well as on an unadjusted basis. They are also available in billions of yen on a seasonally unadjusted basis. The unadjusted data typically show a sharp decline in retail sales in January from December as a result of Christmas sales; the adjusted data often shows an increase in January. The increase this January was one of the biggest on record, as can be seen in the third chart.

The data released today suggest that the Japanese economy is improving,`if somewhat haltingly.

JAPAN  Jan 11 Dec 11 Jan 10 M/M % Y/Y% 2010 2009 2008
Industrial Production     (2005=100) 97.1 94.8 94.3 2.43 2.97 94.1 81.1 103.8
Manufacturer's Shipments (2005=100) 96.9 95.8 95.0 1.15 2.00 95.3 82.1 104.4
Manufacturer's Inventories (2005=100) 100.9 96.4 94.0 4.67 7.34 96.0 97.2 106.4
Inventory/Shipment Ratio (2005=100) 109.3 108.5 108.0 0.74 1.20 108.0 131.2 108.6
Retail Sales (2005=100) 100.0 96.1 100.3 4.06 -0.3 100.6 98.2 100.2
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