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Japan’s coincident indicator index suggests recession

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TOKYO Japan's coincident indicator index declined in March and the government cut its assessment of the economy, a sign it may already be in recession.

Worries about the economy have grown as Japan's exports and factory output were hit by China's economic slowdown and the escalating US-China trade friction, which had disrupted global supply chains.

The index of coincident economic indicators fell a preliminary 0.9 of a point in March from the previous month, the Cabinet Office said yesterday.

In its view on the index, the government described the economy as "worsening".

In February, it was only described as "a turning point towards a downgrade".

The index for leading economic indicators is compiled using data such as job offers and consumer sentiment and is seen as a forward-looking gauge of the economy.

Clouding the outlook are government plans to raise a sales tax to 10 per cent from the current 8 per cent in October unless a big shock on the scale of Lehman Brothers' collapse in 2008 hits the economy.

There is also speculation Prime Minister Shinzo Abe may postpone the sales tax hike as risks to demand grow, having already twice delayed it.

Japan releases gross domestic product data on May 20, which will give a clearer read on the state of the economy and whether the government will proceed with the tax hike as scheduled.- REUTERS