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LEADING INDICATOR OF JAPAN CHIP SALES DOWN IN JUNE
The six-month growth rate is commonly used in business cycle analysis for both signaling impending turning points in business activity and as a recession monitor. The Chip sales leading indicator’s six month recorded a rate of negative 0.8% in June 2012, after recording a reading of 2% in May. Consecutive positive values in the indicator's six-month growth rate predict an end to an economic recession and the beginning of an upcoming expansion.
Two of the seven components that make up the leading indicator for semiconductor sales in the Japanese market improved in June: Japan Competitiveness, 27-country Yen Index and Japanese Short-term Interest Rates. The five components that had a negative contribution to the leading indicator for semiconductor sales in the Japanese market were: Productivity Barometer, US Manufacturing; Non-Japan Demand Prospects, Top-34 partner-countries; Change in Profit Margins, US Semiconductors; Japanese Leading Diffusion Index and Japanese Yield Curve.
“With the June report, after three months of slowing down, the six month growth rate is now in negative territory, indicative of an upcoming recession," commented Maria Simos Sogard, senior analyst. "Also, in our Japan semiconductor industry forecast report, we call for sales to increase 4% in the next 12 months compared with the last 12 months."