Japan's September street-level economy index rises for fifth month; outlook index falls
In short
Japan's Cabinet Office said on October 8 that the current conditions index of its September Economy Watchers Survey rose 0.6 points from August to 47.0, the fifth consecutive monthly rise, and it kept its assessment that the economy shows signs of picking up. The outlook index for two to three months ahead fell 0.9 points to 47.4, with respondents citing concern over rising interest rates.
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Japan's Cabinet Office said on October 8 that the current conditions diffusion index of its September Economy Watchers Survey, seasonally adjusted, rose 0.6 points from the previous month to 47.0. It was the fifth consecutive monthly rise, and the office kept its overall assessment that the economy "shows signs of picking up". TBS NEWS DIG said the survey asks about 2,000 people working across the country how they feel about the economy. [ 1 , 2 , 3 , 4 , 5 ]
Nikkei reported that among the three components of the current index, household-related conditions rose 1.3 points and employment-related conditions rose 0.2 points, while corporate-related conditions fell 1.1 points. Tokyo Shimbun likewise said household and employment conditions improved while corporate conditions worsened. [ 2 , 3 ]
Respondents linked the improvement to the Silver Week holidays, and NHK reported respondents saying consumption grew during the break. Tokyo Shimbun reported that the break was five days long for the first time in 11 years, helping tourism, while Nikkei said the holiday calendar was more favourable than usual. A ryokan inn in the Koshinetsu region said many guests came from far away, according to both outlets, and Nikkei quoted it as saying sales rose sharply. TBS NEWS DIG said autumn clothing sold well and restaurants and lodging saw more customers, and Tokyo Shimbun quoted a clothing store in Tohoku as saying autumn goods were performing strongly. A food manufacturer in Shikoku told the survey that import prices were trending lower because of currency movements, according to Nikkei. [ 2 , 3 , 4 , 5 ]
The outlook index, covering conditions two to three months ahead, fell 0.9 points to 47.4, Nikkei reported, with all three components declining: corporate by 1.3 points, household by 1.0 point and employment by 0.2 points. TBS NEWS DIG said it was the first decline in six months. [ 2 , 5 ]
Concern over rising interest rates was one factor behind the weaker outlook, TBS NEWS DIG reported. Comments mentioning interest rates or rate rises rose from 40 in the August survey to 73 in September, which Nikkei described as 1.8 times the previous month. A housing sales company in Hokuriku said rates had risen and house prices remained high, so more customers faced tight financing plans as mortgage repayments increased. TBS NEWS DIG reported that a car dealer in northern Kanto worried higher rates would lead buyers to hold back, and a financial business in Shikoku said mortgage applications were falling. A travel agency in Hokkaido told the survey that fuel surcharges remained high and rain damage had occurred across the country, leaving few positives for travel demand, Nikkei reported. [ 2 , 5 ]
Why it matters
The survey asks people working across Japan how they feel about the economy, and the September results show holiday spending and autumn sales lifting current sentiment. The drop in the outlook index and a rise in comments about interest rates point to concern among respondents that higher borrowing costs could weigh on housing and car purchases.
Key facts
- The current conditions diffusion index (seasonally adjusted) rose 0.6 points from the previous month to 47.0 in September. [ 2 , 3 , 5 ]
- The current conditions index rose for a fifth consecutive month. [ 1 , 2 , 3 , 4 , 5 ]
- The Cabinet Office kept its overall assessment that the economy "shows signs of picking up". [ 2 , 3 ]
- The outlook index for two to three months ahead fell 0.9 points to 47.4. [ 2 , 5 ]
- Within the current conditions index, the household component rose 1.3 points and employment rose 0.2 points, while the corporate component fell 1.1 points. [ 2 ]
- All three outlook components fell: corporate by 1.3 points, household by 1.0 point and employment by 0.2 points. [ 2 ]
- Comments mentioning interest rates or rate rises increased from 40 in the August survey to 73 in September, about 1.8 times the previous month. [ 2 , 5 ]
- Respondents linked the improvement to the Silver Week holidays and strong sales of autumn clothing. [ 2 , 3 , 4 , 5 ]
Confirmed by several sources
- The September current conditions index rose 0.6 points to 47.0. [ 2 , 3 , 5 ]
- The current conditions index rose for a fifth straight month. [ 1 , 2 , 3 , 4 , 5 ]
- The government maintained its assessment that the economy shows signs of picking up. [ 2 , 3 ]
- The outlook index fell to 47.4. [ 2 , 5 ]
- Household and employment components of the current index improved while the corporate component worsened. [ 2 , 3 ]
- Holiday travel and consumption during the Silver Week break supported the current index. [ 2 , 3 , 4 , 5 ]
- Comments about interest rates and rate rises increased sharply from August. [ 2 , 5 ]
- A housing sales company in Hokuriku said more customers face tight financing plans as mortgage repayments rise. [ 2 , 5 ]
Still unclear
- Whether the outlook index decline was the first in six months. Only TBS NEWS DIG reported that the outlook index fell for the first time in six months.
- Whether this year's Silver Week was a five-day break for the first time in 11 years. Only Tokyo Shimbun reported this; Nikkei said only that the holiday calendar was more favourable than usual.
- The size of the survey sample. Only TBS NEWS DIG said the survey covers about 2,000 people working across the country.
What local media are saying
Timeline, local time
- Yomiuri Shimbun reports the September current index rose 0.6 points for a fifth straight monthly rise. [ 1 ]
- Nikkei reports the index at 47.0, the unchanged assessment and the outlook index falling to 47.4. [ 2 ]
- Tokyo Shimbun reports the five-day Silver Week holiday supported tourism. [ 3 ]
- NHK reports the fifth consecutive rise, citing holiday consumption. [ 4 ]
- TBS NEWS DIG reports the outlook index decline and concern over rising interest rates. [ 5 ]