— Adds Details From 13th Paragraph
— Japan Nov Economy Watchers’ Index 43.6 Vs Oct 40.2
— Japan Nov Watchers’ Forward-Looking Index 41.4 Vs Oct 41.1
— Japan Watchers’ Outlook Index Posts 1st Rise In 2 Months
— Japan Govt Repeats View: Econ Shows Soft Spots After Pickup

TOKYO (MNI) – The Economy Watchers’ Survey index for current
conditions in Japan jumped to 43.6 in November from 40.2 in October,
posting the first rise in four months, thanks to rush purchases of
consumer electronics and higher demand for winter clothing in colder
temperatures, the Cabinet Office said on Wednesday.

The government repeated its assessment of the sentiment from last
month, saying that the latest survey showed that “the economy has been
picking up at a moderate pace but it is now showing soft spots.”

The headline index stood below the key 50 level — the diving line
between net positive and net negative responses to the survey — for the
44th straight month in November.

The 3.4-point fall in November was due to more people saying things
were getting “slightly better” or “better” and fewer people seeing
conditions as being “slightly worse.” It followed a 1.0-point drop in
October and a 3.9-point plunge in September.

Some large electronics retail stores reported long lines of
customers on Nov. 30, who sought to take advantage of full reward points
offered by the government for buying flat-screen TVs, air
conditioners/heaters and refrigerators that require less power to
operate.

The program started in May 2009 and is scheduled to end on March
31, 2011. It is aimed at boosting consumer spending, conserving energy
and helping households convert to digital TVs from analog receivers.

In July and April 2010, the index for current conditions hit 49.8,
the highest level in about three years since 50.8 in March 2007. About
three years ago, 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, rebounded to 41.4 in November from 41.1 in
October, marking the first rise in two months, on eased fears that the
yen’s rise could hurt business and job offer prospects.

The index stayed below the key 50 level for 42 months in a row.

In January 2009 the outlook index rebounded to 22.1 from a record
low of 17.6 hit 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 42.4 in
November from 39.2 in October, up for the first time in four months.

The sub-index was buoyed by strong demand for flat-screen TVs
before the government slashed points for its reward program for buying
greener consumer electronics on Dec. 1 as well as solid demand for
winter clothing in light of lower temperatures.

The business sub-index (manufacturers and non-manufacturers serving
other businesses) stood at 43.5 in November, up from 39.1 in October,
also posting the first rise in 4 months.

Increased orders were seen in the electric and general machinery
sectors, offsetting concerns about lower profits in the face of rising
raw material costs and falling prices of new orders.

The labor sub-index increased to 51.2 from 49.1 in October, posting
the first gain in two months. There was a move to hire workers among
manufacturers.

tokyo@marketnews.com
** Market News International Tokyo Newsroom: 81-3-5403-4833 **

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