As Japan heads for a parliamentary election that will determine whether or not Prime Minister Junichiro Koizumi remains in office, the Conference Board's index of leading economic indicators for Japan is showing a sharp increase. The index increased half a percentage point to 98.6 (1990=100) in June, the most recent month for which data are available, after being flat for the first five months of this year.
Overtime work in manufacturing was a major contributor to the increase although strength among the other components of the leading index has become "somewhat" more widespread, says the Conference Board, a New York-based business research group.
Japan's GDP grew at an inflation-adjusted annual rate of 4.9% during the first three months of this year, and "the current behavior of the leading index suggests that the economy will continue growing in the near term, but more slowly than in the first quarter," says the Conference Board.
Copyright Agence France-Presse, 2005