REPEAT: MNI 5 THINGS: Japan Aug Sentiment Up; Heat Wave Eases

--MNI: Japan Aug Econ Watchers Current Index 48.7; July 46.6

--Japan Aug Watchers Current Index Posts 1st Rise in 2 Months

--Japan Aug Watchers Outlook Index 51.4; July 49.0

--Japan Aug Watchers Outlook Index Posts 1st Rise in 2 Months

--Japan Govt Upgrades View: Moderate Econ Recovery Continuing

--Japan Govt: Firms Concerned of Labor Shortages, Rising Prices

     TOKYO (MNI) - Japan's current and outlook sentiment indexes rebounded

sharply in August as the drag from heavy rains and a continuous heat wave had

waned, but concerns about rising fresh food prices and labor costs lingered, a

key government survey released Monday showed.

     The key points from the latest monthly Economy Watchers Survey, which was

conducted by the Cabinet Office between Aug. 25 and Aug. 31.

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

rose 2.1 points to 48.7 in August on a seasonally adjusted basis, the first rise

in two months after slumping 1.5 points to a nearly two-year low of 46.6 in

July. However, the index stayed below the key level of 50 for the eighth

consecutive month. High temperatures and humidity continued in August but the

conditions were more bearable than in July in some regions. Construction firms

saw demand for rebuilding the areas hit by the killer rain storms in July.

     * The Watchers outlook index showed sentiment about the situation two to

three months ahead also marked the first gain in two months, rising 2.4 points

to 51.4 after falling 1.0 point to 49.0 in July. Supermarkets and department

stores foresaw solid demand for autumn clothing. Transportation firms expected a

rebound in business as the delivery routes cut off by the July rain disaster in

western Japan had been restored.

     * "As in the previous month, the heat wave had a mixed impact: There was

strong retail demand for beverages and air conditioners while people stayed

home, hurting sales at restaurants. But the weather conditions were better in

August than in July," Shigeru Hirota, Cabinet Office director of regional

economies, told reporters. "Looking ahead, there are expectations for autumn

clothing sales, but restaurants continued to see rising fresh vegetable prices

and labor costs hurting their business."

     * The Cabinet Office upgraded its overall economic assessment based on the

Economy Watchers Survey for the first time in five months, saying, "The gradual

recovery continues." Previously, it also said there were signs that "the

recovery was taking a breather."

     "Looking ahead, there are expectations for demand for autumn goods and

higher orders, although there are concerns over labor shortages and rising

costs," the Cabinet Office said, largely repeating its recent statement.

--MNI Tokyo Bureau; tel: +81 90-4670-5309; email: max.sato@marketnews.com