Japan’s June economy watcher sentiment sees first rise in three months

Business sentiment among workers with jobs sensitive to economic trends in Japan improved in June for the first time in three months, as a state of emergency over the coronavirus pandemic was lifted in most of the country, official data showed Thursday.

The diffusion index of confidence in their current conditions compared with three months earlier among “economy watchers,” such as taxi drivers and restaurant staff, soared 9.5 points from May to 47.6, according to the Cabinet Office.

A reading above 50 indicates that more respondents feel conditions are improving rather than worsening.

The office upgraded its assessment of the economy for the first time in three months, saying, “Although the coronavirus pandemic still has a severe impact on the economy, it is picking up.”

The government’s third state of emergency over the virus, which initially covered Tokyo, Kyoto, Osaka and Hyogo from April 25, was repeatedly extended and expanded to 10 prefectures.

The measure was lifted on June 20 except for the island prefecture of Okinawa, but Tokyo and six other prefectures shifted to a quasi-state of emergency, which carries fewer restrictions on business activity and targets high-risk areas rather than entire prefectures.

The office polled 2,050 workers from June 25 to 30, of whom 1,820, or 88.8%, responded.

Under the virus emergency, people are asked to stay home and restaurants and bars serving alcohol to suspend operations. Dining establishments not offering alcohol are requested to close early.

“Sentiment in the food service industry is still at a low level, but it significantly rose as the virus emergency ended in many areas,” a government official told reporters.

In addition, the official said progress in the government’s COVID-19 vaccine rollout has improved sentiment.

A department store worker in the Kinki region in western Japan was quoted as saying, “Sales increased as the operating hours were extended following the end of the virus emergency and customers enjoy shopping and dining out.”

In June, the diffusion index gauging business sentiment regarding the coming months rose 4.8 points from the previous month to 52.4, following a 5.9 point growth in May. It topped 50 for the first time since February.

A hotel worker in central Japan’s Tokai region expected the upcoming Tokyo Olympics and the progress of vaccination will “change the mood.”

The sporting event is set to open on July 23 after a one-year postponement due to the pandemic, but games will highly likely be held without spectators at venues in the capital due to a recent spike in virus cases.