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Economy in Brief

Japan LEI Shows Some Life
by Robert Brusca  August 18, 2011

Japan’s LEI is back to where it was before disaster(s) struck. Its growth rate is up boosted, still, by exports relative to imports and by the Japanese stock market, housing starts and overtime in manufacturing as Japan’s factories try to make up for lost time.

Japan’s own domestic LEI shows a much fuller recovery in Japan than does the LEI leading indicator series for Japan. While Japan’s domestic indicator is pointing higher this month (June) the OECD indicator is beginning to form a rounded top.

Japan is still a country that depends a lot on its ability to export. Japan’s population growth has stagnated and begun to contract. Japan derives its growth from exporting. And in more recent data for July we see that Japan’s exports are losing steam in a trouble global growth environment.

Putting it all together we have some very weak data globally with Japan showing in some ways the most spunk. We can expect Japan to be somewhat underpinned by demand as it has rebounding to do to recover from its series of disasters. But that rebound may turn out to be more domestic in nature and lodged in the building trades as we see the uphill climb exports are going to have as global growth slips, and looks to be severely challenged.

Japan's LEI And Its Trends
  Levels Growth (SAAR)
  Jun-11 May-11 Apr-11 3Mo 6Mo 12Mo 24Mo
LEI Japan 103.2 99.4 96.0 16.2% 6.5% 3.8% 30.0%
Other Leading Measures
Share Prices 100.3 100.3 100.3 0.1% 0.7% 0.8% 2.2%
Int Spread (chngs) 100.2 100.2 100.3 -0.1 0.1 0.2 0.2
Loan/Deposit 99.3 99.3 99.4 0.0 -0.2 -0.6 -1.9
Dwellings Started 100.8 100.8 100.7 0.1 0.2 1.4 3.2
OT-MFG 100.1 99.9 99.7 0.6 1.0 1.3 -3.1
Stocks/Deliv (M&M) 100.3 100.5 100.7 -0.6 -0.6 -0.4 4.2
Exp>Imp 100.8 100.8 100.7 1.1% 1.8% 1.6% -0.9%
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