3 June 2002, 09:48 Japan govt sees April coincident index above 50 pct for 2nd mth - report
TOKYO (AFX-ASIA) - The April diffusion index of coincident indicators, to be
released tomorrow by the Cabinet Office, is expected to exceed the threshold
level of 50 pct for the second straight month, indicating an improvement in the
economy, the Nihon Keizai newspaper cited government sources as saying.
The index last topped 50 pct for two consecutive months in October 2000.
Three straight months over 50 pct generally indicates that a cyclical upturn
in the economy has set in.
The index represents the percentage of economic indicators that have
improved compared with three months earlier.
It has already been learned that of nine indicators comprising the index,
five, including industrial production and the ratio of job offers to seekers,
have turned up in the April preliminary data, the newspaper said.
But the index of producer's shipments of investment goods and
department-store sales are expected to be in negative territory.
Production data is improving thanks to brisk exports to the US and other
Asian countries, but corporate capital investment and consumer spending remain
weak.
Thus, it is not clear whether the improvement in the diffusion index will
translate into a sustained upturn in economic activity.
The index of leading indicators, which serves as the sign of things to come
five to six months ahead, is also expected to exceed 50 pct for the fourth
straight month, the newspaper said.
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