Japan's service sector sentiment improves for 1st time in 4 months

16:48, December 08, 2010      

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Sentiment in Japan's service sector improved in November, marking the first rise in four months, due to purchases of power-saving consumer electronics and a surge in demand for winter apparel, a Cabinet Office survey showed Wednesday.

The current conditions index of the monthly Economy Watchers Survey, in which a score of more than 50 means people view economic conditions in a positive light, rose to 43.6 in November from 40.2 in October, although the headline reading stayed below the key 50 level for the 44th straight month in the recording period, the Cabinet Office reported.

The forward-looking index, which gauges conditions two to three months ahead, rose 0.3 points from a month earlier to 41.4 in November, marking the first rise in two months, the government data showed, however stayed below the 50 level for the 42nd straight month.

The optimistic outlook was due to watchers easing fears that the yen's recent rise could hurt near-future business conditions and adversely affect job offer prospects, the report revealed.

Meanwhile, the diffusion index of sentiment rose to 43.6 from 40.2 logged in October and the government repeated its assessment of the sentiment from last month, saying that the latest survey showed that "the economy has been picking up at a moderate pace but signs of weakness have been seen recently.''

Segments of the economy surveyed include sectors such as retail, restaurant service, and taxi driving and the monthly report serves as both a consumer confidence indicator and a leading indicator for the rest of the economy.

The survey outcome is monitored closely by the Japan's central bank, particularly as the results of the survey are believed to reflect retail sector sentiment more precisely than other regular governmental surveys.



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