— Japan Aug Watchers’ Current Index 43.6 Vs July 44.2
— Japan Aug Watchers’ Current Index Posts 1st Drop in 2 Months
— Japan Aug Watchers’ Forward-Looking Index 43.6 Vs July 44.9
— Japan Aug Forward-Looking Index Posts 4th Straight Drop
— Japan Govt Keeps View: Economy Shows Some Weakness

TOKYO (MNI) – The Economy Watchers’ Survey index for Japan’s
current economic climate marked the first drop in two months as
subsidy-backed car sales have slowed and the global slowdown is hurting
business sentiment, Cabinet Office data released Monday showed.

The forward-looking index fell for the four straight month on
concerns that confidence may be dampened by the government’s plan to
double the 5% sales tax by 2015 and car sales will see a pullback after
the government ends its reward program for buying greener vehicles soon.

The current conditions index fell to 43.6 last month from 44.2. It
remained the lowest level since May 2011, when it stood at 36.0 in the
aftermath of the devastating earthquake that year.

The pace of year-on-year growth in new vehicle sales slowed
further to +7.3% in August from +36.1% in July, the latest industry
data showed.

In December the government revived subsidies for buying
low-emission vehicles. However, because the program is running out of
money due to strong demand, it is expected be terminated again in

The forward-looking index, which gauges conditions two to three
months ahead, slipped to 43.6 in August, down from 44.9 in July, a
fourth straight fall.

Based on the survey results, the government maintained its economic
assessment, saying that the economy “has been picking up moderately but
is now showing some weakness.”

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

The household sub-index for the current conditions dropped to 42.1
in August from 42.8 in July while the business sub-index for current
conditions fell to 44.0 in August from 44.8 in July.

By contrast, the labor sub-index rebounded slightly to 52.5 in
August from 52.1 in July as job offers increased in the wholesale and
retail sectors as well as the service industry.

The Cabinet Office said the survey was conducted between Aug. 25
and Aug. 31.

** MNI Tokyo Newsroom: 81-3-6860-4820 **

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