Japan Annualized Housing Starts

Annualized Housing Starts demonstrate a change in the number of new housing projects that started during the reported month, on an annualized basis. The data is published by the Ministry of Land, Infrastructure, Transport and Tourism.

Construction data is difficult to compare on the month-over-month basis, as volumes are highly dependent on the season and other factors. For example, construction volumes in Japan increase after the rainy season and in the summer; in colder regions construction decreases significantly in late autumn. Therefore, seasonally adjusted housing indicators converted to annualized values are considered to be more convenient, as they enable efficient comparison between periods.

Before starting construction, a company should file a construction start notice. The indicator is calculated based on these notices. Companies indicate the construction area and estimated costs, which makes it possible to assess the impact on other types of production activities (for example, the production of building materials) and employment in the construction sector. Furthermore, an increase in demand for new homes may lead to an increased demand for other products needed to new home buyers, such as new furniture, appliances, etc. Generally, an increase in demand for new homes points to the growth of the population welfare.

Therefore higher readings of housing starts may have a positive impact on the Japanese yen quotes.