Key Japan indicator rises for 4th month in September, outlook index jumps

By Daniel Leussink

TOKYO (Reuters) - A key Japanese economic indicator improved for the fourth straight month in September, suggesting relief is at hand for an economy still feeling the drag from the coronavirus pandemic.

The index of coincident economic indicators - calculated off a range of data including factory output, employment and retail sales numbers - rose a preliminary 1.4 points from the previous month to 80.8 in September, the Cabinet Office said on Monday.

The government said that the index in September indicated economic activity had stopped contracting, leaving unchanged its August assessment.

The data takes some pressure off the government to speed up the recovery of the economy, which is feeling the drag from weak business and household spending.

Prime Minister Yoshihide Suga is expected to announce a plan for extra stimulus measures to help the economy overcome the COVID-19 crisis, government and ruling party sources told Reuters last month.

The figure also came after the Bank of Japan upgraded its view on the recovery outlook at its policy meeting last month, signalling that it has delivered enough stimulus for now.

The index for leading economic indicators, which is a gauge of the economy a few months ahead and is compiled using data such as job offers and consumer sentiment, soared 4.4 points to 92.9 from August, its biggest rise since a 5.4-point jump in June.

Gross domestic product data for the third quarter due on Nov. 16 is expected to show the economy rebounded from a record slump, thanks largely to a recovery in exports and output.

 

(Reporting by Daniel Leussink; Editing by Chang-Ran Kim and Stephen Coates)