TOKYO, Sept. 7 (Xinhua) -- Japan's coincident composite index ( CI), which reflects current business conditions, rose 0.5 point to 101.8 in July, marking the second successive monthly gain, the Cabinet Office said in a report on Tuesday.
According to the government's preliminary report, the composite index of coincident indicators, such as industrial output and retail sales, stood at 101.8 against the 2005 base of 100.
The 0.5 point rise was credited to growth in manufacturing sales, increase employment opportunities and large-scale energy consumption, the report stated.
Conversely, producers' investment goods shipments (excluding transport equipment) and overtime hours worked at factories, weighed on the index.
The leading composite index, which predicts business conditions in the near future lost 0.8 point to 98.2 in the recording month, marking the frost decline in two months, while the lagging CI, which reflects economic conditions in the three months past rose 2. 2 points to 85.7 in July, the Cabinet Office said.
The diffusion index (DI) of coincident indicators stood at 50.0 in July compared to 55.0 in the previous month and the coincident DI stayed above the key 50 level for the 14th straight month, the government noted.
A reading above 50 points indicates an economic expansion and sense of optimism about business conditions, while a reading below 50 indicates contraction and pessimism.
The diffusion index of leading indicators stood at 30.0 in July compared to 27.3 in June, at which time the index fell below 50 for the first time in 15 months.
The lagging DI in July came in at 75.0 a leap from June's 20.0, the report reveled.
The Cabinet Office maintained its recent assessment based on the coincident CI, saying the index shows Japan's economy is " improving."