MNI BRIEF: Japan Aug Sentiment Index Rises For 4th Month

Japan’s Economy Watchers sentiment index rose for the fourth straight month in August, though the government maintained its overall assessment, data released Monday by the Cabinet Office showed.

The index for current economic conditions climbed to a seasonally adjusted 46.7 from 45.2 in July, while the outlook index for two to three months ahead rose to 47.5 from 47.3. Indicators linked to households and businesses improved, but the labour market component fell.

The outlook index for two to three months ahead also rose for the fourth straight month in August.

“The economy shows a sign of recovering. Looking ahead, while there are concerns over price rises and the impact of U.S. trade policy, the recovery is likely to continue,” the government said.

A Cabinet Office official told reporters that persistent labor shortages and high labour costs were behind the weaker labour market index.

The result will ease concern among Bank of Japan officials that private consumption might lose momentum as households struggle with elevated living costs and other consumer-related indicators remain subdued.