Indexes of leading indicators from the japanese government and the Conference Board (CB) point towards an improvement of the economic conditions in Japan. The Cabinet Office index increased in January for a third month in a row according to data published on March 7. As to the CB index, released March 8, it jumped 1.3% in January, after a slight increase in December, allowing the semestrial evolution of the index to turn to positive territory, after many months in the negative.
The leading indicators let presage a return to growth in Japan after a decline in economic activity during the fourth quarter of 2010. Forecasts for the japanese economy were revised slightly upward recently, the average GDP growth estimate for 2011 passing from 1.5% in early February to 1.7% in early March according to The Economist. Deflation remains a serious problem in Japan, and it continues to affect downward the economic outlook.
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