No. 37 — September 29, 2000


Weekly Review

--- by Douglas Ostrom

For nearly 40 years, the Japan Economic Institute and, before it, the United States-Japan Trade Council have provided statistics and analyses relating to trade between the United States and Japan and, for a slightly shorter time, information on current conditions and prospects for the Japanese economy and insight into such data. This report, the last from JEI, offers guidance for finding statistical sources and interpreting them.

Since the mid-1960s, when the Trade Council began covering developments in the Japanese economy, the organization's task has changed from that of simply getting hard-to-obtain numbers into the hands of English-speaking readers &emdash; sometimes with a lag of months from their release in Japan &emdash; to sifting through the abundance of data available on the Internet and elsewhere in order to provide manageable sets of figures accompanied by appropriate commentary. In some instances, the data and the analyses have been available on JEI's Web site within hours of Tokyo's release of the numbers.

Over this period, and particularly since the late 1970s, JEI and its predecessor have attempted to provide data that were comparable over time, sometimes with surprising success. This task has been made simpler by the considerable uniformity in Japanese data-collection practices.

Economic Outlook - The organization's coverage of Tokyo's annual economic outlook, typically announced in December, is a prime example of its consistent reporting and analysis. The last article on this subject (see JEI Report No. 1B, January 7, 2000) provided an account of the forecast that, although much more detailed and arguably more skeptical in tone, was similar in many respects to the analysis in one of the first such articles published by the Trade Council (see Council Report No. 7, January 24, 1966).

Perhaps because Washington produces nothing identical or because the document usually is released during the December holiday season, the mainstream American media pay scant attention to the economic forecast &emdash; not just at the time of its announcement but later in the year &emdash; despite the extremely wide coverage it receives in Japan. People interested in the forthcoming outlook should consult Japanese media sources around December 20.

The Economic Planning Agency, the source of the prognosis, keeps statistical details of the outlook on its Web site ( throughout the year. Japanese business journals, particularly the February issue of the monthly Toyo Keizai Tokei Geppo, which is published by Toyo Keizai Inc., offer extensive comparisons with private-sector predictions. Unfortunately, while many of the tables in Toyo Keizai Tokei Geppo are bilingual, the annual outlook is provided only in Japanese.

Gross Domestic Product - Japan's overall economic condition, as captured by quarterly gross domestic product data, has been a perennial focus of JEI Report. Under current practice, the Japanese GDP statistics are not available until the third month of the quarter following the relevant period. For example, the April-June figures came out in early September (see JEI Report No. 35B, September 15, 2000). Analysts in the United States should be aware that the release of the U.S. GDP numbers precedes that of its counterpart by several weeks. Moreover, the American national output statistics are more comprehensive.

Most nationwide American and European media with extensive economic coverage report Japan's GDP figures, albeit without much detail or comparison to previous figures. EPA's Web site provides multiple tables, detailing both nominal and price-adjusted GDP by demand component. Quarterly, calendar-year and fiscal-year data are available. If anything, the site is too comprehensive, including little-used information going back to 1955 on such quarterly series as nonseasonally adjusted GDP. Fortunately, EPA also provides summary tables and figures.

EPA will substantially alter the GDP series beginning with the next release of data in December. At that time, it will switch to the Organization for Economic Cooperation and Development's benchmark, the so-called SNA 93 standard. The change, which is expected to increase Japan's reported growth rate, will ensure more detail on the components of GDP as well as greater comparability with the statistics of other OECD members.

As an alternative to the sometimes volatile GDP numbers, some foreign analysts use the Ministry of International Trade and Industry's all-activity index as an indicator of changes in overall economic activity (see JEI Report No. 34B, September 3, 1999). However, few information sources carry this series; in fact, not even MITI's Web site has it. Although the index is available sooner than the GDP numbers, it is less detailed and has a much shorter track record.

Tankan - The tankan (survey of short-term business prospects), which the Bank of Japan conducts quarterly, receives enormous play in Japan. JEI Report and other English-language publications have covered the release of this poll of corporate expectations more carefully in recent years, but most of the attention is focused on the diffusion index &emdash; the measure of the degree of business confidence among large manufacturers. In fact, the tankan includes useful information on labor conditions, profitability, credit markets, plant and equipment spending, and other indicators for firms of all sizes. BOJ publishes extensive results from the tankan on its Web site ( and in print.

Trade Data - JEI Report long has provided quarterly analyses of Japan's two main series of trade statistics: the customs-clearance trade numbers and the current account. To the extent that American media report on Japanese trade, they typically use one or more of the Department of Commerce's figures for bilateral trade, thereby omitting any discussion of Japan's trade with third countries. The Commerce Department series as well as the customs-clearance trade and current account data are reported monthly. In an effort to provide a consistent perspective and to reduce the confusion resulting from such a plethora of numbers, JEI Report aggregated the monthly figures into quarterly ones.

The Ministry of Finance's Web site ( provides both the customs-clearance and the current account statistics in exhaustive detail. Because of the way the site is organized, however, a quick overview of bilateral trade is difficult to obtain, particularly if the purpose is to compare data with tables published in past issues of JEI Report. In certain cases, such traditional publications as BOJ's Balance of Payments Monthly might prove to be more convenient, especially for quarterly figures. Some details of Japan's trade still are not available on-line. For these, consult the Japan Tariff Association's monthly Summary Report: Trade of Japan or JTA's even more detailed Japan's Exports & Imports.

Japan's current account statistics deserve a special note. Since January 1996, coverage has been expanded, detail has been increased and yen rather than dollar figures have been used for presentation, creating complications in terms of comparability with earlier data. The details, particularly on financial flows, can be exasperating, but perseverance is rewarded. One of JEI's long-standing tasks has been to explain to journalists that net outbound capital flows necessarily equal the current account surplus. MOF figures provide the link between the two concepts. The offsets have changed over time, with implications for the state of the economy, likely exchange rate levels and more.

Additional Data - Other statistical information on Japan's economy comes from a variety of government agencies and private institutions. One particularly useful and timely evaluation and description of various data sources is J.P. Morgan Securities Asia Ltd. Pte.'s Japan Data Watch Handbook, published in September 2000. Much older but still useful is The DIR Guide to Japanese Economic Statistics, authored by Brian Rose and Mikihiro Matsuoka and published in 1994 by Oxford University Press.

The main Web site for Japanese data, apart from those of EPA and MOF, is that of the Management and Coordination Agency's Statistics Bureau ( It contains most of the employment data and the results of the monthly Family Income and Expenditure Survey. Industrial production, however, is found at MITI's Web site ( and in many print publications. Readers of Japanese can consult the Web site of leading business daily Nihon Keizai Shimbun ( for the same summary economic data that appear in its print publications.

In addition, U.S. government agencies, the Federal Reserve Board, the OECD and private sources offer limited amounts of data concerning Japan on their Web sites and in print. In a few instances, the information differs from that available from Japanese sources, partly because overseas experts make their own statistical adjustments. The Department of Labor's Bureau of Labor Statistics, for example, has its own series on Japanese unemployment.

This survey may suggest to many readers that the economic data compiled by the Japanese government and other sources are abundant, thereby confirming the widely held view that the quality and the quantity of the information are excellent. That impression would be misleading, at least in reference to what is available in the United States and in Canada. Compared with U.S. statistics, for example, Japanese data are released more slowly, are less comprehensive and are not as likely to be available on-line. Moreover, the statistical procedures that are employed to compile the data &emdash; for example, seasonal adjustment and sampling techniques &emdash; are less sophisticated. Finally, Japanese analysts, particularly but not exclusively those in the government, do not always give an unbiased analysis of the numbers.

In short, caution is in order, both in interpreting the numbers and in assessing analysts' interpretations. Patience also is needed. Quarterly data, particularly the GDP statistics, provide a more comprehensive picture of the economy than the monthly figures often used. Gaining an understanding of the world's second-largest economy is like fitting together a jigsaw puzzle. Without most of the pieces in place, the picture will not be clear. Moreover, the process cannot be rushed.

The views expressed in this report are those of the author
and do not necessarily represent those of the Japan Economic Institute.

This is the final issue of JEI Report.
All members of the JEI staff wish to thank subscribers to the publication
for their loyalty and support over theyears.

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