MNI BRIEF: Japan Sept Sentiment Index Drops; Govt Cuts View

Japan's Economy Watchers sentiment index posted its second monthly drop in September, falling a seasonally adjusted 3.7 points to 49.9, while the outlook index for two-three months ahead also fell 1.9 points to 49.5, prompting the government to lower its assessment.

The Economy Watchers report, released by the Cabinet Office Tuesday, showed worsening of all three components linked to households, firms and labour drove the fall. The move will also cloud the Bank of Japan’s view that private consumption is expected to continue increasing moderately.

The government said that the economy is recovering moderately but “it is marking time.” Looking ahead, the economy's moderate recovery will likely continue, although concern exists over the impact of high prices.