|Month over Month||0.7%||0.1%|
|Year over Year||1.6%||0.8%|
Japan's All Industry Index rose to a seasonally adjusted level of 104.0 in February, up 0.7 percent on the month after a drop of 0.4 percent in January (revised from an increase of 0.1 percent). This relatively large difference in month-on-month growth rates between January and February likely reflects to some extent the impact of lunar new year holidays in the region. To adjust for this impact, the average of the index for January and February this year is virtually unchanged from the level recorded in December.
The increase in the headline index in December was almost entirely driven by stronger growth in industrial sector, where output grew by 3.2 percent on the year after a drop of 2.1 percent in January. These are also relatively large moves on the month and again likely reflect they impact of lunar new year holidays. The index of activity in the tertiary sector rose 0.2 percent on the month after a fall of 0.2 percent in January, while the constriction sector's activity index showed a fall of 0.5 percent after an increase of 2.1 percent the previous month.
In year-on-year terms, the seasonally adjusted index advanced 1.6 percent in February after an increase of 0.6 percent in January (revised down from 0.8 percent). Using unadjusted data, the index was flat on the year in February after increasing by 1.2 percent in January (revised from 1.3 percent), while the average of the index for these two months is up 0.6 percent from the average for the same two months in 2016.
The All Industry Index takes a reading of activity in the tertiary index combined with activity in the construction, agricultural and fisheries industries, the public sector and industrial output. This index is considered a close approximation for gross domestic product growth as measured by industrial and service sector output.
The all industry index evaluates the monthly change in overall production by all sectors of the Japanese economy. The index includes the tertiary index which is released a few days before the all industry plus the construction, agricultural and fisheries industries, the public sector and industrial output. The index closely follows Japanese GDP and overall growth figures, providing insight into current levels of Japanese economic expansion.