Japan Economy Watchers Survey

Economy Watcher Survey DI improves for the third consecutive month.

Published monthly by the Cabinet Office. Updated till the month of June 2017 (published on July 10th, 2017)

Recent data trend:

In June 2017, the current economic DI improved by 1.4 points from the previous month to 50. On similar lines, the future DI improved to 50.5 from 49.6. This marks the third consecutive month of improvement, although the index remains slightly below the recent peak achieved in Nov 2016.

In terms of current DI, all three sub-components exhibit the overall positive trend. As regards future outlook DI, household and corporate DIs improved, while employment related DI declined by 1.8 points from 54.8 in May to 53. A decline suggests that job seekers do not expect the labor market to be favorable for future employment offers. The figure is, however, in contrast to the June employment index figure of consumer confidence which rose to 48.1 (26-month high). In our view, the decline may be reversed in the next month, mostly due to an increase in the job offers to applicant ratio to 1.49 in May which indicates a tight labor market.

The continued rebound in the survey figures since April, reiterates that the economy is on a positive footing. There is some concern that the medium to longer term factors remain averse towards Japan though, as it is largely dependent on the global economic outlook and BoJ's ability to maintain the current accommodating stance over the next few years.

Brief overview of “Economy watchers survey":

"Economy watchers survey" is a survey of people who are working in industries that are sensitive to economic trends, such as household activity, corporate activity, and employment. This index is a diffusion index (DI). The index over 50 indicates that the economy is expanding, while the index below 50 indicates that the economy is contracting. 

DI for current conditions indicate the direction of change compared to 3 months ago, and DI for future condition index indicates the expected direction of change within the next 2 or 3 months.

For more information, visit the official government page

Source: Cabinet Office, JMA

The Next Release Date:  August 8th, 2017

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