Japan Housing Starts y/y

Housing Starts y/y reflect changes in the number of new residential construction projects, which started in the reported month, compared to the same month a year ago. The Ministry of Land, Infrastructure, Transport and Tourism publishes the relevant data on the last day of the reported month.

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, construction dynamics is best reflected in year-over-year indicators.

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.