— Japan April Watchers’ Current Index 28.3 Vs March 27.7
— Japan Watchers’ Current Index Posts 1st Rise in 2 Months
— Japan Apr Watchers Forward-Looking Index 38.4 Vs Mar 26.6
— Japan Govt Says Economy Stays in Severe State Due to Quake
— Japan Tohoku Area Apr Watchers Current Index 23.5 Vs Mar 16.8
— Japan Tohoku-Area Apr Outlook Index 36.7 Vs Mar 21.1

TOKYO (MNI) – The Economy Watchers’ Survey index for current
economic conditions in Japan rebounded slightly from a two-year low in
April as Japanese firms and the government are stepping up their efforts
to restore the quake-hit northeastern provinces, data released by the
Cabinet Office on Thursday showed.

The current condition index stood at 28.3 in April, up from 27.7 in
March, when it hit the lowest level since 19.4 in February 2009 at the
height of the global recession.

The slight rebound followed a 20.7-point plunge in the headline
index in March, which was the largest fall under the Watchers’ data
series dating to January 2000.

The Cabinet Office noted that the small gain in April was led by a
gradual turnaround in consumer sentiment after a few weeks of national
mourning during which time people trimmed spending out of respect for
the victims of the March 11 earthquake and tsunami.

The survey showed that business sentiment was still down in April
as supply chain disruptions continued amid rising costs of energy and
raw materials.

The government said the economy stays in a severe condition due to
the fallout from the disaster.

Previously, it said that the survey showed Japan’s economic climate
“has rapidly declined to a severe state in light of the Great East Japan
Earthquake.”

The government has said the massive damage inflicted on Japan’s
northeastern Pacific coast is estimated at up to Y25 trillion ($309
billion), making it the costliest natural disaster in the country’s
post-war history.

The estimated damage would exceed the toll of around Y9.6 trillion
from the Great Hanshin Earthquake, which hit the western Japanese port
city of Kobe on Jan. 17, 1995.

As the quake hit major industries in Japan, new car sales tumbled
at a record pace in April, according to the latest data released by the
Japan Automobile Dealers Association.

New vehicle sales plunged 51.0% from a year earlier to 108,824 last
month, the eighth straight month of a year-on-year decline, following a
37.0% drop in March.

The previous record decline was marked in May 1974, when sales
plunged 45.1% following the outbreak of the first oil crisis. The
association began compiling automobile sales data in comparative form in
January 1969.

But Toyota Motor Corp said on Wednesday it now plans to normalize
production in stages, starting in June, on global basis, rather than
starting in July in Japan and in August overseas as announced on April
22.

The headline Watchers’ index stood below the key 50 level — the
diving line between net positive and net negative responses to the
survey — for the 49th straight month in February.

In July and April 2010, the index for current conditions hit 49.8,
the highest level since 50.8 in March 2007. In the spring of 2007, the
Japanese economy was still in its longest post-war expansion period that
ended in October 2007.

Meanwhile, the forward-looking index, which gauges conditions two
to three months ahead, rose to 38.4 in April from 26.6 in March, marking
the first rise in three months.

The outlook index has stayed below the key 50 level for 47 months
in a row. It hit a record low of 17.6 in December 2008.

The watchers’ index gauges whether respondents with jobs most
sensitive to economic conditions — taxi and truck drivers, department
store sales staff and restaurant and shop owners — believe economic
conditions have improved or worsened from three months before.

The survey outcome is monitored closely by the Bank of Japan as it
appears to reflect retail sector sentiment more accurately than some
other data.

The household sub-index for current conditions rose to 27.1 in
April from 25.3 in March, posting the first rise in two months.

The business sub-index (manufacturers and non-manufacturers serving
other businesses) stood at 29.3 in April, down from 30.6 in March,
posting the second straight drop.

The labor sub-index fell to 33.8 in April from 37.3 in March, also
down for the second consecutive month. This index reached 58.9 in
February, the highest level since 60.6 in October 2006, when Japan’s
unemployment rate was around 4%, much lower than 4.6% in February this
year.

The current index for the Tohoku region in the north, which was hit
hardest by the March 11 disaster, rose to 23.5 in April from 16.8 in
March, while the forward-looking index for the region climbed to 36.7
from 21.1 in March.

Tohoku comprises seven prefectures including Iwate, Miyagi and
Fukushima.

The Cabinet Office said 94.8% of the watchers in Tohoku responded
in the April survey, in line with their usual level of 92% to 96%.

The Cabinet Office said the survey was conducted between April 25
and 30.

tokyo@marketnews.com
** Market News International Tokyo Newsroom: 81-3-5403-4835 **

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