The Conference Board(R) Japan Business Cycle Indicators(SM)

Japan Leading Economic Indicators and Related Composite Indexes for June 2008

NEW YORK, Aug. 5 /PRNewswire/ -- The Conference Board reports today that
the leading index for Japan decreased 1.3 percent and the coincident index
decreased 0.9 percent in June.
-- The leading index declined sharply in June for the seventh consecutive
month, due mainly to sharp drops in new orders for machinery and construction,
stock prices, and the Tankan business conditions survey. The leading index
fell 4.2 percent (about a -8.1 percent annual rate) from December to June,
almost identical to the rate of decline during the second half of last year.
In addition, the weaknesses among the leading indicators continued to be
widespread.
-- The coincident index also declined in June following a smaller
decrease in May. All components declined, and wage and salary income and
industrial production made the largest negative contributions to the
coincident index in June. With this decline, the six-month change in the
coincident index has now dropped to a -1.6 percent rate (a -3.3 percent annual
rate) in the six-month period through June, down from a 0.7 percent annual
rate in the second half of 2007. Moreover, the weaknesses among the coincident
indicators have become far more widespread than the strengths in recent
months.
-- Since the middle of 2007, the leading index has been on a downtrend
and its rate of decline has picked up in recent months. The leading index is
now 8.8 percent lower than its most recent highest level in December 2006.
Meanwhile, the coincident index has decreased moderately since November 2007.
Real GDP grew at a 4.0 percent annual rate in the first quarter of 2008, up
from the 1.9 percent average annual rate during the second half of 2007 and a
1.0 percent average annual rate in the first half of the year. The weaknesses
in both leading and coincident indexes in recent months suggest that economic
growth is likely to slow in the near term and that risks for economic weakness
are increasing.
LEADING INDICATORS. Four of the ten components that make up the leading
index increased in June. The positive contributors to the index -- in order
from the largest positive contributor to the smallest -- include dwelling
units started, interest rate spread, the (inverted) business failures*, and
the six-month growth rate of labor productivity. The negative contributors -
in order from the largest negative contributor to the smallest - include the
new orders for machinery and construction component*, stock prices, the Tankan
business conditions survey, the index of overtime worked, real operating
profits*, and real money supply.
With the decrease of 1.3 percent in June, the leading index now stands at
80.8 (1990=100). Based on revised data, this index decreased 0.6 percent in
May and decreased 0.5 percent in April. During the six-month span through
June, the index decreased 4.2 percent, and two of the ten components advanced
(diffusion index, six-month span equals 25.0 percent).
COINCIDENT INDICATORS. All four components that make up the coincident
index decreased in June. The negative contributors to the index - in order
from the largest negative contributor to the smallest - include wage and
salary income*, industrial production, number of employed persons, and the
retail, wholesale, and manufacturing sales* component.
With the decrease of 0.9 percent in June, the coincident index now stands
at 107.3 (1990=100). Based on revised data, this index decreased 0.1 percent
in May and increased 0.4 percent in April. During the six-month span through
June, the index decreased -1.6 percent, and none of the four components
advanced (diffusion index, six-month span equals 0.0 percent).

Summary Table of Composite Indexes

2007 6-month
Apr May Jun Dec to Jun

Leading index 82.4 p 81.9 p 80.8 p
Percent Change -0.5 p -0.6 p -1.3 p -4.2 p
Diffusion 35.0 40.0 35.0 25.0

Coincident Index 108.4 108.3 p 107.3 p
Percent Change 0.4 -0.1 p -0.9 p -1.6 p
Diffusion 75.0 25.0 0.0 0.0

n.a. Not available p Preliminary r Revised
Indexes equal 100 in 1990
Source: The Conference Board All Rights Reserved

Website: http://www.conference-board.org/economics/bci/

The next release of the Japan Composite Indexes is scheduled for
Tuesday, September 09, 2008 at 9:00 P.M. (ET)
In Japan -- September 10, 2008 at 10:00 A.M. (JST)

SOURCE The Conference Board

Indicator Program, +1-212-339-0330, indicators@conference-board.org; or Media,
Frank Tortorici, +1-212-339-0231, or Carol Courter, +1-212-339-0232, both of
The Conference Board