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Japan’s April Coincident Index Hits 9-Year High

Japan’s April Coincident Index Hits 9-Year HighJapan’s April Coincident Index Hits 9-Year High

Japan’s index gauging the current state of the economy hit a nine-year high in April, government data showed on Wednesday, a sign a solid recovery was taking hold thanks to improvements in the global economy.

Robust factory output of automobile and electronic parts was the main driver of the improvement, adding to a recent slew of bright signs for the export-reliant economy, Reuters reported.

The index of coincident economic indicators, which consists of data such as industrial output, employment and retail sales, rose 3.3 point from the previous month to 117.7 in April, the highest level since February 2008.

“The economy continues to do pretty well due to strong exports,” said Yoshiki Shinke, chief economist at Dai-ichi Life Research Institute. “We can expect a steady recovery to continue as exports keep increasing, public works investment is seen rising and capital expenditure will recover reflecting growing corporate profits.”

The government uses the coincident index to make a preliminary judgment on whether the economy is recovering or in recession .The index measuring the outlook for the economy, compiled using leading indicators like job offers and consumer sentiment, fell 1.2 point to 104.5 after two straight months of rises, the data said.

The government maintained its assessment for the seventh straight month that the index shows the economy is recovering.

Japan’s economy grew in the first quarter at its fastest pace in a year on robust exports and a helpful boost from private consumption. Analysts expect the economy to continue growing above its potential as long as overseas demand holds up.

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