MNI DATA IMPACT: Japan Oct Sentiment Down On Retail, Eating

--Japan Oct Econ Watchers Current Index 36.7; Sep 46.7 

--Japan Oct Watchers Current Index Posts 1st Drop in 3 Months 

--Japan Oct Watchers Outlook Index 43.7; Sep 36.9 

--Japan Oct Watchers Outlook Index Posts 1st Rise in 4 Months 

--Japan Govt Keeps View: Weakness seen in recovery

     TOKYO (MNI) - Japan's current sentiment index posted a first drop in three

months, hit by unfavorable items linked to retail sales and drinking/eating

services caused by a slowdown following a front-loaded rise in demand before the

sales tax hike, a key government survey released Monday showed.

     The monthly survey indicates whether respondents with jobs most sensitive

to economic conditions -- taxi and truck drivers, department-store sales staff

and restaurant and shop owners -- think economic conditions have improved or

worsened from the three months prior.

     These are the key points from the latest Economy Watchers Survey, conducted

by the Cabinet Office between October 25 and October 31.

     --The Economy Watchers sentiment index for Japan's current economic climate

fell 10.0 points to 36.7 in October on a seasonally adjusted basis, after rising

3.9 points to 46.7 in September. July's 41.2 was the lowest level since April

2016 when it was also at 41.2. October's 36.7 is the lowest level since May 2011

when it was at 33.5.

     --The 10-point drop in October was smaller than the drop of 15.7 points

seen in April 2014 after the previous tax hike.

     --The Watchers outlook index for two to three months ahead showed the first

rise in four months, up 6.8 points to 43.7 after falling 2.8 points to 36.9 in

September on the back of better outlook for retail sales and services as well as

eating/drinking. September's 36.9 is the lowest level since March 2014 (before

the sales tax hike to 8% from 5%) when it was at 33.5.

     --The Cabinet Office left its overall economic assessment based on the

Economy Watchers Survey, saying, "weakness is seen in the recovery." An official

at the Cabinet Office said that the government didn't lower its assessment as

the drop in the October index was mainly caused by temporary factors, such as

the tax hike and typhoon.

     --"There are concerns over the post-tax hike impact and the impact of a

powerful typhoon. Looking ahead, there are concerns over the outlook for

overseas economies but hope for an economic recovery is also seen," the Cabinet

Office said.

--MNI Tokyo Bureau; tel: +81 90-2175-0040; email: hiroshi.inoue@marketnews.com

--MNI London Bureau; tel: +44 203-586-2225; email: les.commons@marketnews.com

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