MNI BRIEF: Japan Oct Sentiment, Outlook Indexes Both Fall
MNI (TOKYO) - Japan's sentiment and outlook index for two-three months ahead both posted their second straight drop in October as households continued to be hit by high prices and firms suffered high costs, the Economy Watchers released by the Cabinet Office showed Monday.
The Economy Watchers sentiment index for the current economic climate stood at a seasonally adjusted 47.5 in October, down from 47.8 in September, while the outlook index for two to three months ahead fell 1.4 points to 48.3 from 49.7. The indexes linked to households, businesses and the labour market fell.
The government left its assessment, saying “the economy continued recovering moderately as a trend. Looking ahead, a moderate economic recovery is likely to continue, although there is concern over the impact of high prices.”
An official at the Cabinet Office told reporters that retailers were hit by households’ savings as many prices were revised up in October, noting comments on the weak yen and high prices increased compared with the previous month.
Bank of Japan officials are focused on whether the worsening of sentiment will lead to weaker spending as they expect private consumption to remain solid on the back of improving income conditions. (See MNI BOJ WATCH: Ueda Opens Door To Dec Hike, Eyes U.S., Mkts)