A Framework That Provides Clarity

During periods of “low visibility,” confusion reigns: for every indication of one trend, there seems to be a countertrend. The key is to glean from the collective wisdom of reliable leading indicators a clear signal that the economy is headed for a turn.

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May 27 2015

Prospects for Japanese Industrial Growth

A broadening international industrial upturn is underway, and in Japan this upswing began relatively early, as it did in other countries where currency depreciation has acted as a tailwind. Indeed, after bottoming last summer, Japanese industrial production (JAIP) growth reached a ten-month high in January. Though growth dipped recently, the latest figure still beat consensus expectations. Even so, that weakness has caused some unease, casting doubt on what comes next for the industrial sector.

In this context, ECRI’s latest analysis examines the relationship between the growth rates of the Japanese Leading Manufacturing Index (JALMI) and JAIP. Because cyclical turns in JALMI growth typically lead those in JAIP growth, the growth rate of the JALMI already reveals a clear trajectory for industrial growth in the coming months.

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