Japan April sentiment picks up slightly but outlook uncertain

15, May. 2019

TOKYO, NNA – A key Japanese index of public sentiment about the economy recovered some ground in April as tensions in the U.S.-China trade row had appeared to ease, but some respondents expect a pullback in consumer spending after the extended 10-day spring holiday.

The Cabinet Office released the monthly Economy Watchers Survey on Tuesday, conducted between April 25 and April 30.

It polls people in sectors that are most sensitive to changing economic conditions, such as taxi and truck drivers, department-store sales staff and restaurant and shop owners, asking whether they think economic conditions have improved or worsened from the three months prior.

Key points:

―― The Economy Watchers index of current sentiment rose 0.5 point to 45.3 in April on a seasonally adjusted basis, the first rise in two months after plunging 2.7 points in March to 44.8, the lowest level since 44.4 in July 2016. The index was below the key level of 50 for the fifth straight month.

―― The long holiday boosted tourism but retail sales suffered.

―― The Watchers outlook index of sentiment showing the outlook two to three months ahead marked the third straight monthly drop, down 0.2 point to 48.4.

“The corporate sector sentiment improved last month when the U.S.-China tension showed a temporary easing,” said Shigeru Hirota, Cabinet Office director of regional economies. “But concerns about overseas economic conditions could push down sentiment.”


―― The Cabinet Office left unchanged its overall economic assessment based on the Economy Watchers Survey, saying, “weakness is seen in the recovery.” It said that looking ahead, there are concerns about overseas developments.

―― While expectations for spending on luxury goods are high ahead of the sales tax hike to 10 percent in October from the current 8 percent, Hiroto said there are concerns among retailers that price increases last month at the start of the fiscal year will dampen consumption.