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Economy in Brief

Japan's Tertiary Index Sinks
by Robert Brusca   October 18, 2010

Japan's service sector (Tertiary index) dipped in August as we remain unclear if the herky-jerky recovery in services is still in force or not. The services sector is looking like it is in recovery and its Yr/Yr rise is respectably strong. Still, that rise still is from a base of activity that was depressed. Its 1.7% rise in August of 20101 is from a base in 2009 when the index was falling by 4% Yr/Yr. January of 2011 will be the strongest test for the tertiary index since then it will have to post Yr-on-Yr gains from a month in which the index had risen a year before.

Even so the index level of the tertiary index stands in the top 40% of its historic values. Since this index climbs over time that standing is not a strong one. Even so, the strength of the year-on-year percentage rise puts the tertiary index in the top 30% of its all-time range, a more correct comparison and one in which it emerges as relatively stronger. Still a lot of that is owing to the easy comparison with the year before.

It may be that with the US about to embark on QE the yen is going to see the upward pressure on it abate. That would be a blessing for Japan. But Japan is still struggling. Since it is so linked into the world economy we will have to see a global recovery take hold in a better more solid way before we can breathe easy on Japan.

Up To Date Japan Industry Survey
  Recent Months Moving Averages Extremes; Range
3Mo 6Mo 12Mo Max Min %-Tile
Mining and MFG 94.3 94.8 95.0 94.7 95.2 92.3 110.1 71.4 59.2%
Tertiary 98.7 98.9 97.3 98.3 97.6 97.4 103.5 90.8 62.2%
Ranges, Max, Min since 1993
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