Tokyo, Feb. 5 (Bloomberg) -- Japan's economy will probably expand in half a year as job offers and spending on durable goods improve, the country's index of leading indicators suggested. The leading index, which includes job offers, machinery orders and other indicators, was at 60 percent in December, compared with 63.6 percent in November, the Cabinet Office said. A reading above 50 signals economic growth in about six months' time, and a lower reading points to a contraction. Growth may not last, economists say, as companies including NEC Corp., Japan's biggest personal computer maker, cut sales forecasts even while reporting better-than-expected earnings. Exports and production, the main drivers of growth, slumped in December.
``There are no real strengths in the economy right now,'' said Tatsuya Torikoshi, a senior economist at Daiwa Institute of Research. ``We've entered a period of economic stagnation.'' NEC last month cut its full-year sales forecast by 3 percent because customers are scaling back on spending. The Tokyo-based company narrowed its net loss to 4.5 billion yen ($37.6 billion) in the three months ended Dec. 31 from its 155 billion-yen loss in the same quarter of the previous year. Exports, which have fueled Japan's recovery from the third recession in a decade, fell a more-than-expected 7.3 percent in December from a month earlier. Industrial production has fallen four straight months to December.
The coincident index, which tracks factory production, power use by large manufacturers and department store sales to measure current economic performance, was at 44.4 percent compared with 30 percent in November, today's report showed. The percentage is derived by dividing the number of positive components by all available components. //www.quote.bloomberg.com