Japan ‘economy watcher’ sentiment rose to 16-year high in December

Business sentiment rose in December among workers in Japan with jobs sensitive to economic trends, reaching their highest level in 16 years, as confidence among retailers grew toward the year-end holidays amid relatively subdued coronavirus case numbers, government data showed Wednesday.

The diffusion index of confidence in current conditions compared with three months earlier among “economy watchers,” such as taxi drivers and restaurant staff, rose 0.1 point from November to 56.4, the highest reading since December 2005, according to the Cabinet Office.

The figure, further improving from the eight-year high in November, advanced for the fourth consecutive month.

A reading above 50 indicates that more respondents feel conditions are improving than worsening. The office polled 2,050 workers from Dec. 25 to Dec. 31, of whom 1,796, or 87.6%, responded.

The omicron coronavirus variant was first confirmed in Japan on Nov. 30 and its first community transmission on Dec. 22 in Osaka Prefecture, just before the survey was conducted.

The office maintained its assessment of the economy from the previous month, saying, “The economy is picking up though concerns remain over the coronavirus pandemic.”

While sentiment among eateries declined 6.1 points from the previous month to 62.1, that of retailers rose 3.0 points to 56.7.

Many workers seemed to be heartened by more people going out for the Christmas and New Year holidays, a government official said.

Looking ahead, the diffusion index gauging business sentiment in the coming months fell 4.0 points for the second straight month of decline, to 49.4, falling below the boom-or-bust line for the first time since August, when parts of the country were under a COVID-19 state of emergency or quasi-emergency.

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