Japan’s economy watcher sentiment almost back

12 August, 2020 12:00 AM printer

TOKYO: Business sentiment among workers in Japan with jobs sensitive to economic trends in July almost returned to levels seen before the coronavirus outbreak, as social and economic activities gradually resumed, government data showed Tuesday.

The diffusion index of confidence among “economy watchers” such as taxi drivers and restaurant staff, released by the Cabinet Office, rose 2.3 points from June to 41.1, compared with 41.9 logged in January when the fallout from the virus outbreak in China was yet to be felt in Japan, report agencies.

The reading in the reporting month increased for the third consecutive month after a record-low figure of 7.9 was marked in April, when a nationwide state of emergency was declared to prevent the virus spread, dealing a heavy blow to the world’s third-largest economy.

As for the outlook, however, the economy watchers expressed a pessimistic view, with the diffusion index gauging business sentiment regarding the coming months decreasing 8.0 points to 36.0.

A government official told reporters that the outlook figure, down for the first time in three months, is believed to reflect a recent resurgence in infections seen across the country.

“We can see indications of a pickup from the outcome as economic activities have been partially lifted by the government’s support measures such as cash handouts and a subsidy campaign for tourists, while negative effects of the resurgence in virus cases appeared in the latter half of the month,” the official said.

In May, the government began delivering 100,000 yen ($942) each to 126 million residents in Japan and launched a subsidy campaign called “Go To Travel” in late July to boost the virus-hit domestic tourism industry.

But the travel promotion policy has drawn fire from the start amid concerns that it could further spread the virus infection.

A reading below 50 indicates that more respondents reported worsening conditions than improving ones.

The index on current conditions in June had logged the largest month-to-month rise of 23.3 points since comparable data became available in January 2002.