— Japan Apr Econ Watchers’ Index Up For 5 Months In Row ; Mar 47.4
— Japan Apr Econ Watchers’ Index Highest Since 50.8 In Mar 2007
— Japan Apr Watchers’ Forward-Looking Index 49.9 Vs Mar 47.0
— Japan Watchers’ Outlook Index Also Up For 5 Months In Row
— Japan Govt Repeats: Econ Tough But Move For Pickup Seen

TOKYO (MNI) – The Economy Watchers’ Survey index for current
conditions in Japan hit a fresh three-year high, rising to 49.8 in April
from 47.4 in March, marking the fifth straight monthly rise on strong
demand for low-emission vehicles, the Cabinet Office said on Thursday.

The index level was already at a three-year high in March but it
was now at the highest level since 50.8 marked in March 2007, when the
economy was still during its longest post-war expansion period that
ended in late 2007.

In April the headline index stood below the key 50 level — the
dividing line between net positive and net negative responses to the
survey — for the 37th straight month.

The latest survey showed that “the economy is in tough condition
but there are signs of an improvement,” the Cabinet Office said,
repeating its view from the previous month, when it upgraded it for the
second straight month.

“The household index rose despite slower sales of flat-screen TVs
in payback for rush demand in March before changes were made to the
reward program for purchases of greener consumer electronics, and thanks
to solid sales of passenger cars on subsidies and tax breaks for buying
low emission vehicles,” the Cabinet Office said.

It repeated that consumers still sought lower priced goods but they
were more willing to spend.

The survey was conducted between April 25 and April 30.

The 2.4-point rise in April was due to fewer people saying things
were unchanged or worse than three months earlier and more people seeing
conditions were “slightly better.” It followed a 5.3-point rise in
March.

The 7.0-point drop in November 2009, which is believed to have been
caused by the government’s ill-timed announcement that Japan was back in
mild deflation, was the largest fall since the survey began in August
2001.

The headline index hit a record low of 15.9 in December 2008 at the
height of the global financial crisis, but posted its first gain in 10
months in January 2009 as more people thought conditions were unchanged
after deteriorating drastically in previous months.

The index then rose for seven months in a row but bad weather
conditions and the pandemic of swine flu hurt sentiment in August 2009.
It fell in October and November last year on fears of a worsening
deflation after rising briefly in September.

In the latest month, the business index (manufacturers and
non-manufacturers serving other businesses) posted the fourth straight
monthly gain as both orders and sales improved despite downward pressure
on prices, the Cabinet Office said, repeating its recent assessment.

The labor index posted the fifth straight monthly rise because some
firms began to hire people, as seen in the previous months.

The overall forward-looking index, which gauges conditions two to
three months ahead, rose to 49.9 in April from 47.0 in March, up for the
fifth month in a row.

The index stayed below the key 50 level for 35 months in a row.

In January 2009 the index rebounded to 22.1 from a record low of
17.6 hit in December 2008.

The outlook index rose on expectations that the stimulus measure to
hand out allowances to families with children as well as tax breaks for
buying low emission vehicles and the reward program for buying greener
homes and renovating existing homes to be more energy efficient should
support the household sector, despite concern about rising gasoline
prices, the Cabinet Office said.

Companies expect orders to grow and there are moves to hire
more employees, it added.

The survey outcome is monitored closely by the Bank of Japan as it
appears to reflect retail sector sentiment more accurately than some
other data.

The watchers’ index gauges whether respondents with jobs most
sensitive to economic conditions — taxi and truck drivers, department
store sales staff and restaurant and shop owners — believe economic
conditions have improved or worsened from three months before.

tokyo@marketnews.com
** Market News International Tokyo Newsroom: 81-3-5403-4833 **

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