Japan Economic Index Shows Strong Rebound from Quake

Japan’s index of leading economic indicators rose to 99.8 in May from 96.2 in April. It was the first gain in three months and the biggest increase since such data began in 1980, said the Cabinet Office.

The index is seen as the best evidence that Japan is recovering strongly from the March earthquake and tsunami, led by a sharp jump in production, consumer confidence and small-firm profits.

The index of coincident indicators — which is based on current industrial output, large-lot electricity use and other readings — rose to 106.0 in May from 103.6 in April, the second consecutive month of increase. It comes on the heels of a record drop in March when northeastern Japan was devastated by the March 11 9.0 earthquake and tsunami.

The government said the index signals “improvement.”

The index of lagging indicators, which provides a snapshot of economic performance in recent months, rose to 91.5 in May from 90.8 in April, the second straight monthly increase. It shows recovering household spending and improving employment conditions.