REPEAT: MNI 5 THINGS: Japan June Sentiment Up on Hot Weather

--Japan June Econ Watchers Current Index 48.1; May 47.1

--Japan June Watchers Current Index Posts 1st M/M Rise in 2 Mths

--Japan June Watchers Outlook Index 50.0; May 49.2

--Japan June Watchers Outlook Index Posts 1st M/M Rise in 2 Mths

--Japan Govt Repeats: Signs of Moderate Recovery Pausing

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

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

June, led by strong demand for beverages and air conditioners in light of a dry

rainy season and forecasts for hot summer months ahead, but concerns about

higher costs, labor shortages and U.S. trade rows linger, a key government

survey released Monday showed.

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

conducted between June 25 and June 30.

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

rose 1.0 point to 48.1 in June on a seasonally adjusted basis after slumping 1.9

points to 47.1 in May on by disappointing sales during the Golden Week holidays

and falling profit margins amid higher costs. It was the first month-on-month

rise in two months. The index stayed below the key level of 50 for the sixth

consecutive month.

     * The Economy Watchers outlook index showed sentiment about the situation

two to three months ahead also marked the first rise in two months, rising 0.8

point to 50.0 in June after falling 0.9 point to 49.2 in May. In addition to

hopes for strong demand for beverages and summer clothing, the real estate

industry also reported that there were active inquiries for home purchases ahead

of the sales tax hike scheduled in October 2019.

     * "High temperatures in an unusually dry rainy season boosted sales of

seasonal goods," Shigeru Hirota, Cabinet Office director of regional economies,

told reporters. "The outlook sentiment for the retail sector also rose on the

forecasts for hot summer weather." The FIFA World Cup raised interest in

travelling overseas in general, supporting travel agencies, while some people

stayed home and watched the games, hurting sales at some restaurants and bars,

he said.

     * On the downside, comments made by Watchers showed there were persistent

concerns about higher energy and raw material costs as well as labor shortages

and the drag from the U.S. disputes with its major trading partners, the survey

showed.

     * The corporate sector sentiment for the current climate slumped in June,

hit by parts supply constraints for electrical machinery makers, while the

non-manufacturing sector confidence was also dampened by labor supply

constraints, Hirota noted.

     * The Cabinet Office maintained its overall economic assessment based on

the Economy Watchers Survey after downgrading it for the first time in four

months last month, saying, "The gradual recovery continues but there are signs

that it is taking a breather."

     "Looking ahead, there remain expectations for orders and business

investment, although there are concerns over labor shortages and rising costs,"

the Cabinet Office said, repeating its recent statement.

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