Japan slump eases, coincident index shows
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Bloomberg
Oluşturulma Tarihi: Temmuz 07, 2009 00:00
TOKYO - Japan’s deepest postwar recession is abating, the government’s broadest measure of economic health showed.
The coincident index climbed to 86.9 in May from 86 in April, the Cabinet Office said Monday in Tokyo, matching the median estimate of economists surveyed by Bloomberg News. The gauge, a composite of 11 indicators including factory production and retail sales, rose for a second month. The worst of Japan’s recession may be over as companies increase output and Prime Minister Taro Aso’s 25 trillion yen ($260 billion) in stimulus measures boosts confidence. Even so, rising unemployment is constraining consumer demand at home and abroad, damping prospects for a speedy revival.
"Production and exports will likely continue to recover moderately and the stimulus measures to help consumers are starting to take effect," said Susumu Kato, chief economist at Calyon Securities in Tokyo. "Japan’s economy is still at a low level, but there’s no doubt that the economy is heading for a recovery."
The world’s second-largest economy probably grew for the first time in a year last quarter. Analysts predict gross domestic product rose at an annual 2.3 percent pace from a record 14.2 percent contraction in the first three months. Bank of Japan Governor Masaaki Shirakawa said in a speech Monday that exports and industrial production "have begun to turn around," adding that Japan’s recovery may lose momentum as companies trim investment and job losses undermine consumption.
Factory output rose for a third month in May and the central bank’s Tankan survey last week showed sentiment among large manufacturers rebounded from a record low. Investor optimism that the worst is over for Japan has also spurred a 37 percent gain in the Nikkei 225 Stock Average since March 10, when it was at a 26-year low.
Still, job losses and declines in wages are undermining consumer spending. The unemployment rate surged to a five-year high of 5.2 percent in May and the ratio of jobs to applicants fell to a record low. Wages declined for a 12th month in May.
"Production and exports will likely continue to recover moderately and the stimulus measures to help consumers are starting to take effect," said Susumu Kato, chief economist at Calyon Securities in Tokyo. "Japan’s economy is still at a low level, but there’s no doubt that the economy is heading for a recovery."
The world’s second-largest economy probably grew for the first time in a year last quarter. Analysts predict gross domestic product rose at an annual 2.3 percent pace from a record 14.2 percent contraction in the first three months. Bank of Japan Governor Masaaki Shirakawa said in a speech Monday that exports and industrial production "have begun to turn around," adding that Japan’s recovery may lose momentum as companies trim investment and job losses undermine consumption.
Factory output rose for a third month in May and the central bank’s Tankan survey last week showed sentiment among large manufacturers rebounded from a record low. Investor optimism that the worst is over for Japan has also spurred a 37 percent gain in the Nikkei 225 Stock Average since March 10, when it was at a 26-year low.
Still, job losses and declines in wages are undermining consumer spending. The unemployment rate surged to a five-year high of 5.2 percent in May and the ratio of jobs to applicants fell to a record low. Wages declined for a 12th month in May.