Japan Economy Watchers Survey

Confidence about current economic conditions rose by 23.3 points to 38.8 in June.

Published monthly by the Cabinet Office. Updated until June 2020 (published on July 8th, 2020)

Brief Overview of "Economy Watchers Survey"

The "Economy watchers survey" is a monthly survey of people who are working in industries that are sensitive to economic trends, such as household activity, corporate activity, and employment which is released by the Cabinet Office. Household activity can be broken down into retail related, food related, service related and housing related industry. Corporate activity can be broken down into manufacturing and non-manufacturing. There are also regional indices which help understand the economic conditions by region.

For the current economic conditions, the respondents are asked if the economic conditions around them have improved compared to those of 3 months ago. For the future economic conditions, the respondents are asked if they believe the economic conditions around them will be improving in the next 2-3 months. The index is calculated by multiplying the percentage of respondents by the points of each of the five response options; better (+1), slightly better (+0.75), unchanged (+0.5), slightly worse (+0.25), worse (0). This index is a diffusion index (DI). The index over 50 indicates that the economy is expanding, while the index under 50 indicates that the economy is contracting.

The index is useful to grasp the direction of the economic trend early on and the reasoning behind it for the following reasons: First, the index has a precedence to the peak and troughs of the economic cycle. Second, the Cabinet Office releases the reasoning of the answers of the respondents simultaneously as the release of the index. Finally, the index is one of the earliest released economic indicators of the month.

For more information, visit the official government page

Source: Cabinet Office, JMA

The Next Release Date: August 8th, 2020

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