Nando Times

Japan's economic recovery losing steam, group says

By the Associated Press

TOKYO (October 4, 2000 12:34 a.m. EDT http://www.nandotimes.com) - Japan's recovery may be slowing, according to a New York-based research and business group which analyzed the nation's economic data for July.

The Conference Board, which introduced a leading economic indicators series for Japan on Wednesday, said the Japanese economy is still mired in the problems that plagued it over the past decade.

"These indicators represent a cautionary signal for the Japanese economy," the Conference Board said in a statement. "While both the leading and coincident indicators have improved since mid-1998, Japan remains in the stagnation that has characterized its economy since the early 1990s."

The group plans to continue publishing the numbers on a monthly basis, as it does for the U.S. economy. Leading economic indicators, based on officially released data, aim to forecast how an economy will perform.

The Conference Board said half of Japan's individual indicators in its July "leading index" were lower in the six months to July from the six months to June, and "this broad weakness suggests economic activity will slow in coming months."

The group also produces a "coincident index," which declined in July after six months of weakness, "suggesting that GDP growth may disappoint going forward," the Conference Board said.

The Japanese government and economists have hailed recent growth in the economy as a sign that it is finally emerging from its toughest downturn since the end of World War II.

The nation's gross domestic product grew 0.6 percent in the fiscal year that ended March 31, following two consecutive years of contraction, and GDP grew 2.5 percent in the January-March quarter and 1.0 percent growth in the April-June period.

The Conference Board's leading index takes into account data on yield spread, growth in labor productivity, changes in consumer credit outstanding, overtime worked, new orders for machinery and construction, stock prices and other factors.

The coincident index covers wages, as well as wholesale, retail and manufacturing sales, plus industrial production and employment numbers.

-- Rachel Gibson (rgibson@hotmail.com), October 04, 2000