/www.bloomberg.com/ By Daisuke Takato
Tokyo, Jan. 10 (Bloomberg) -- Japan's leading economic index, an indicator of performance in about six months' time, rose above the level that predicts an expansion.
The index, which includes job offers, machinery orders and other indicators of future activity, rose to 72.2 percent in November from 40 percent in October, the Cabinet Office said. A reading above 50 signals economic growth, and a lower reading points to a contraction.
The world's second-biggest economy has slowed even though the leading index rose in 10 of the last 11 months. Growth slowed to an annual pace of 0.8 percent in the third quarter from 0.9 percent in the second, and the government last month said the recovery from recession is faltering as production slumps and jobs evaporate.
``The economy has stalled,'' said Azusa Kato, an economist at BNP Paribas Securities in Tokyo. ``Exports may show a gradual recovery in the middle of next year, but it won't be anywhere near as strong as before.''
Exports, which accounted for half of the second quarter's expansion, slowed to growth of 0.6 percent in the third quarter from 5.9 percent. Industrial production fell for three straight months to November as companies such as Tokyo Electron Ltd. cut back in response to falling overseas sales.
Tokyo Electron, the world's second-biggest supplier of chipmaking equipment, last month said orders would fall short of expectations in the third quarter. It has cut its full-year net income forecast by 75 percent.
The coincident index, which tracks factory production, power use by large manufacturers and department store sales to measure current economic performance, fell to 33.3 percent from 90 percent in October, today's report showed. That was the first drop below the 50 percent mark in 10 months.
The percentage is derived by dividing the number of positive components by all available components.