Glossary: Japanese indicators

The importance of each indicator for the foreign exchange and bond markets is marked out of five in parentheses. So (1/3) means that an indicator is very important for foreign exchange and reasonably important for the bond market.

Balance of payments
Consumer price index
Gross domestic product
Industrial production index
Job offers and applicants
Leading and coincident indices of business conditions
Machinery orders
Retail sales
The short-term economic survey of enterprises (Tankan report)
Unemployment rate
Wholesale price index

The short-term economic survey of enterprises (Tankan report) (1/1)

The Tankan report is compiled quarterly by the Research and Statistics Department of the Bank of Japan. It is widely respected as an indicator of business conditions because of its early release and vast coverage.
The survey is conducted in February, May, August, and November. Figures are released in the first week of the following months.

Balance of payments (1/4)

Figures are released monthly (with a two-month lag) and semi-annually.
Balance of payments statistics provide data on Japan's international economic transactions, including goods, services, investment income, and capital movements. The current account (goods, services and interest payments) is the most frequently used measure of Japan's international trade.
Recently, trade in services has grown rapidly and imports of services now roughly equal merchandise exports.

Industrial production index (2/2)

The industrial production index is considered an important indicator and a good measure of business conditions for several reasons: its prompt availability, its sensitivity to changes in business conditions, and its detailed subclassifications.
Preliminary figures for the previous month are released at the end of each month. Revised figures are released around the middle of the following month.

Gross domestic product (2/2)

GDP is the conventional measure of output. It is looked at to confirm rather than to predict a trend.
GDP figures are released quarterly.

Machinery orders (2/2)

Machinery orders statistics are seen as being an important indicator of firms' capital investment and business activities. The report is a survey of 308 designated manufacturers of industry.
The figures are released monthly with a lag of around two months.

Unemployment rate (3/3)

Japan's unemployment rate shot up to almost 5% in 1999, having hovered around 2% to 3% for over 20 years. Corporate restructuring following a decade in or near recession is putting paid to the concept of a job for life.
Trimming the layers of corporate flab will help the economy recover in the long run. But rising unemployment threatens the recovery in the short term, since it encourages consumers to save rather than spend.
The jobless rate is seen as a sign of how seriously companies are taking restructuring -- and as a pointer to economic slowdown ahead.
Japan's unemployment rate is included in the monthly report on the labour force survey. An annual report is published in the spring each year.

Consumer Price Index (CPI) (3/3)

The CPI is calculated from the results of the monthly retail price survey conducted in 167 municipalities nationwide.
The CPI tends to lag behind the movement of the wholesale price index because it covers the prices of goods sold further down the line, to final consumers. It is also largely dependent on wages, which are slow to move. For example, in 1986 and 1987 when the yen's appreciation and the collapse of oil prices caused wholesale prices to fall significantly, the CPI still showed a small increase.
CPI is released on the Friday of the week including the 26th of the month, with a lag of one month. Revised figures are released around the middle of the following month.

Wholesale price index (WPI) (3/3)

The WPI measures the price of commodities traded in the business sector. It is calculated as the weighted average of three price indexes: the domestic wholesale price index; the export price index; and the import price index. The domestic wholesale price index carries the most weight in the final figure.
Wholesale prices are considered a better indicator of business conditions than consumer prices because they cover only the business sector. Wholesale prices tend to lead consumer prices by three to six months.
Released three times a month, monthly, and annually. The figure for the previous month is released in the middle of each month

Job offers and applicants (4/3)

The job offers and applicants data reflects prevailing labour-market conditions.
The statistics are compiled via 599 public employment agencies. Job offers is the number of jobs newly offered through the employment agencies each month. Job applicants refers to the number of job seekers applying at the employment agencies.
The number of new job offers has a strong correlation with business conditions: the stronger the economy, the more jobs are offered.
The relationship between economic conditions and job applications though, is less clear; those listed as applicants include people looking for a second job. The usefulness of the data is also limited by the fact that it only covers about 20% of the labour market.
The statistics are released around the end of each month.

Leading and coincident indices of business conditions (4/3)

The leading index uses 13 separate economic indicators to look at future business conditions. The coincident index is composed from 11 indicators and attempts to gauge current business activity. The par level is 50%.
Released at the end of each month with a two-month lag.

Retail sales (4/4)

The statistics cover department store and supermarket sales. Department stores account for 55% of the total, supermarkets 45%.
Department store sales are considered to be sensitive to changes in general business conditions. They include purchases by firms as well as by consumers.
Released at the and of each month with a one-month lag. Revised figures are released one month later.