Economic conditions improve in Japan for 10th straight month

15:34, March 09, 2010      

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Japan's broadest economic indicator, the coincident index, rose for the 10th consecutive month in January, according to data released by the Cabinet Office on Tuesday.

The coincident index rose 2.5 points to 99.9 points, adding to other figures that suggest Japan's export-fueled recovery is still going strong. One hundred points mark the average result of data from 2005.

Manufacturing and mining saw an increase of 0.29 points for the month, while industrial power consumption grew by 0.34 points. Retail sales also grew by 0.23 points, and wholesale sales by 0.36 points. The effective job offer rate also posted an increase of 0. 38 points, its biggest jump in years.

The Cabinet Office, however, maintained its opinion for the fifth straight month that the economy is "improving," signaling that while most data suggest the recovery is in full swing, there are reasons to be hesitant. Much of Japan's growth is currently fueled by exports abroad and stimulus measures put in place by the government and other institutions at home.

In the leading indicators, the consumer confidence index increased by 0.69 points, indicating that households are becoming more willing to spend money. New job offers, however, declined by 0.07 points. Housing construction was also up by 0.35 points and the index of producer's shipment of durable goods by 0.6 points.

In lagging indicators, the unemployment rate decreased by 0.81 points and corporation tax revenue grew by 0.8 points.

Data released earlier in March showed that despite measures taken by the Bank of Japan (BOJ) to pump trillions of yen into the economy, corporations were less willing to take out loans and invest in future businesses. Deflation also continues to pose a problem for the nation.

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