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Japan's service sector sentiment drops for 1st time in 2 months

Xinhua, December 8, 2015 Adjust font size:

Sentiment in Japan's service sector worsened for the first time in two months in November, the Cabinet Office said in a report Tuesday.

According to the government's report, warmer weather restricted sales of winter-related goods, with the diffusion index of sentiment about current economic conditions dropping 2.1 points in the recording month to a reading of 46.1.

The reading marks the fourth straight month the index has come in below the boom-or-bust 50 line, where a reading less than 50 means that those "watchers" surveyed have a pessimistic feeling about business conditions compared to a score above 50 meaning the opposite.

But the government, nevertheless, opted to maintain its basic view of the economy as "recovering moderately."

Upwardly revised GDP data released Tuesday morning showed that rather than Japan's economy slipping into recession in the third quarter of this year, the economy, owing to increased capital expenditure, consumer spending and exports, grew by an annualized 1.0 percent in the quarter, although leading economists believe that growth in the current quarter will be tepid if not largely flat.

The sentiment index for economic conditions, meanwhile, in the coming months, stood at 48.2, marking the first decline in three months, the Cabinet Office also said Tuesday, with "watchers" still wary about a slowdown in overseas economies, ongoing geopolitical crises, and concerns that a renewed global oil glut may affect fuel prices here.

The Economy Watchers survey asks business-cycle sensitive workers their thoughts on existing and future economic conditions, to provide the government with a detailed picture of economic trends in Japan.

Segments of the economy surveyed in November included sectors such as retail, restaurant service, and taxi driving and the monthly report serves as both a consumer confidence indicator and a leading indicator for the rest of the economy.

The outcome of the monthly survey is followed closely by the Bank of Japan as it reflects retail sector sentiment more precisely than some other government data. In the recording month, the Cabinet Office surveyed 2,250 workers across Japan. Enditem