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

Japan Leading Economic Indicators and Related Composite Indexes for December

2005

NEW YORK, Feb. 7 /PRNewswire/ -- The Conference Board reports today
that the leading index for Japan increased 0.5 percent and the
coincident index increased 0.2 percent in December.

-- The leading index increased again in December. With December's gain,

the leading index has been growing at about a 4.0 - 5.0 percent annual

rate in recent months, up from the zero to slightly negative growth at

the end of 2004, and only slightly below the recent high growth rate of

6.0 - 7.0 percent reached in the first half of 2004. In addition, the

strength among the leading indicators continued to be widespread in

recent months.

-- The coincident index also increased in December, but its growth in the

last quarter of 2005 was slightly slower than earlier in the year.

Real GDP growth slowed to a 1.0 percent annual rate in the third

quarter of 2005, down from the 5.3 percent average rate in the first

half of 2005. The continued widespread improvement in the leading index

suggests that the economy is likely to continue expanding in the near

term, and the sluggish rate reported in the third quarter of 2005

should not persist.

LEADING INDICATORS. Eight of the ten components that make up the
leading index increased in December. The positive contributors to the
index -- in order from the largest positive contributor to the
smallest -- include stock prices, the new orders for machinery and
construction component, the (inverted) business failures, the six
month growth rate of labor productivity, the Tankan business
conditions survey, dwelling units started, yield spread, and real
operating profits*. Real money supply and the index of overtime worked
declined in December.

With the increase of 0.5 percent in December, the leading index now
stands at 101.1 (1990=100). Based on revised data, this index
increased 0.5 percent in both November and October. During the
six-month span through December, the index increased 2.2 percent, and
eight of the ten components advanced (diffusion index, six-month span
equals 80.0 percent).

COINCIDENT INDICATORS. All four components that make up the coincident
index increased in December. The positive contributors to the index --
in order from the largest positive contributor to the smallest --
include industrial production, the retail, wholesale, and
manufacturing sales* component, number of employed persons, and wage
and salary income*.

With the increase of 0.2 percent in December, the coincident index now
stands at 105.6 (1990=100). Based on revised data, this index declined
0.1 percent in November and was unchanged in October. During the
six-month span through December, the index increased 0.6 percent, and
three of the four components advanced (diffusion index, six-month span
equals 75.0 percent).

DATA AVAILABILITY AND NOTES. The data series used to compute the two
composite indexes reported in this release are those available "as of"
5:00 P.M. ET February 6, 2006. Some series are estimated as noted
below.

* The series in the leading index that are based on The Conference
Board estimates are real operating profits and the six month growth
rate of labor productivity. The series in the coincident index that
are based on The Conference Board estimates are real manufacturing
sales and wage and salary income.

Summary Table of Composite Indexes

2005 6-month

Oct. Nov. Dec. Jun. to Dec.

Leading index 100.1 p 100.6 p 101.1 p

Percent Change +0.5 p +0.5 p +0.5 p +2.2 p

Diffusion 80.0 80.0 75.0 80.0

Coincident Index 105.5 p 105.4 p 105.6 p

Percent Change 0.0 p -0.1 p +0.2 p +0.6 p

Diffusion 62.5 75.0 75.0 75.0

n.a. Not available p Preliminary r Revised

Indexes equal 100 in 1990

Source: The Conference Board

For more information, visit our Website:
http://www.conference-board.org/economics/bci

The next release of the Japan Composite Indexes is scheduled for

March 9, 2006 at 8:00 P.M. (ET)

In Japan---March 10, 2006 at 10:00 A.M. (JST) SOURCE The Conference Board