The Industry index from METI is in a sharp decline and is lower over six months for a period of three months running. Services (the tertiary index) tend to be more stable. Their index has slowed in the past few months and even fell in May but it is growing at pace just below 2%.

The tertiary and industry index are still relatively strong in their five year context. Fixing them in the range of values they have experienced over the past five years we find that the tertiary index is in its 95^Th percentile (top 5-percent). The Industrial gauge is a bit lower but resides in the 84^th percentile about the top 15 percentile of its range. The percentile standing of the MFG sector is higher than we get from other surveys of Japan (NTC has the MFG sector in the bottom 30 percent of its five year range). Japan remains unconcerned about this weakness and the BoJ continues to talk of when it will go back to hiking rates. Onew BOJ board member thinks they should already have hiked them again.