Japan's service sector sentiment improves in October

Sentiment in Japan's service sector improved in October for the first time in three months, helped by good weather and an increase in tourists visiting Japan, a government report said on Tuesday.

According to the Cabinet Office's "Economy Watchers" survey for October, the diffusion index for Japan's current economic climate rose 0.7 point from the previous month to 48.2, although failed to breach the key 50-mark threshold for the third successive month, the report revealed.

With the corporate sector showing evidence of increased trade based on tourism, thanks to a comparatively weak yen making Japan an attractive hub for holiday makers, coupled with clement weather during the recording period, the office maintained its basic assessment of the economy, stating that it is "recovering moderately" despite the downside effects of other Asian nation's slowing economies.

The forward-looking index, which gauges conditions two to three months ahead stood at 49.1, the same reading as a month earlier, while overall "watchers" were seen to be optimistic about their upcoming winter bonuses and increased appetite in the approaching festive period for new durable goods.

The watchers' index gauges feelings from respondents with service sector-related jobs, which are sensitive to economic swings, about upcoming prospects and conditions. Those surveyed include taxi and truck drivers, department store sales staff and restaurant and shop owners.

Readings below 50 indicate that pessimistic views outnumber optimistic opinions of those surveyed.

The outcome of the monthly survey is followed closely by the Bank of Japan (BOJ) as it reflects retail sector sentiment more precisely than some other government data.

The nationwide survey targeted 2,050 people on Oct. 25-31, according to the Cabinet Office, with the survey garnering a 90.5-percent response rate. Endit