Again, Japan short term economic outlook is difficult to assess when using the leading indicator indices. On February 10th, the Conference Board indicated that its index for that country decreased in December (-0.4%), continuing a trend that has been going on for many months. To the contrary, on February the 7th, the Cabinet Office of Japan released its preliminary evaluation of its leading indicator index, and it showed in December a second increase in a row. Let see, on February the 14th, what the OECD will report from its composite leading index on Japan. See the update at the third paragraph.
Nonetheless, 2011 will be a year of slow growth for Japan. In its January update of its World Economic Outlook, the IMF forecasts a GDP growth of only 1.6%. Growth estimates from The Economist most recent pool of forecasters go from a low of 0.8% to a high of 3.1%, the average being 1.5%. Remember that economic growth in Japan in 2010 is estimated at between 4% and 4.5%, after a contraction of 6.3% in 2009.
Update : Japan Cabinet Office (CO) indicated on February 14th that economic growth in 2010 is estimated at 3.9%, and that the fourth quarter showed a contraction of 1.1% (annualised) of the economic activity. It published also on February 17th the complete version of its monthly leading indicator index, and it confirms that the index increased in December for a second month in a row; it lets believe to a return to growth in the first quarter of this year. The evolution of the CO leading index since last spring allowed us to anticipate the slowdown in economic activity at the end of last year. The OECD monthly leading index for Japan did not announce the contraction in the last quarter of 2010, and the data released on February 14th by that organism allow to maintain a pronostic of economic expansion in the coming months. The Conference Board leading index anticipated the slowdown but it still does not show a return to significant growth in the coming months.
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