Japan Economy Watcher Sentiment:

 https://mainichi.jp/english/articles/20210708/p2g/00m/0bu/053000c

Article:

TOKYO (Kyodo) -- Business sentiment among workers with jobs sensitive to economic trends in Japan improved in June for the first time in three months, as a state of emergency over the coronavirus pandemic was lifted in most of the country, official data showed Thursday.

The diffusion index of confidence in their current conditions compared with three months earlier among "economy watchers," such as taxi drivers and restaurant staff, soared 9.5 points from May to 47.6, according to the Cabinet Office.

A reading above 50 indicates that more respondents feel conditions are improving rather than worsening.

Ideas:

Economy watchers, as they are called, have good reasons to be concerned about the state of the economy and the virus situation, as economy watchers work in the services industry and as such people to people contact can be very stressful during this time.

The services industry is always the industry that is hit hard whenever the Japanese government decides on a new state of emergency.

And now, even if they don't customers demand is still very low among many of the services in industry companies and businesses.

Customer demand/consumer demand, most likely, for the remainder of the summer is going to be much lower than the pre-pandemic levels, as the new variants are also now in Japan and customers are still not sure what is going on.

However, as I watch and look at some YouTube videos related to some people walking around Tokyo at night, it seems not everyone is concerned about the virus situation, as I see some people without masks on and there seems to be a lot of people out and about in Tokyo in the main entertainment areas.

Article:

The office upgraded its assessment of the economy for the first time in three months, saying, "Although the coronavirus pandemic still has a severe impact on the economy, it is picking up."

The government's third state of emergency over the virus, which initially covered Tokyo, Kyoto, Osaka and Hyogo from April 25, was repeatedly extended and expanded to 10 prefectures.

The measure was lifted on June 20 except for the southern island prefecture of Okinawa, but Tokyo and six other prefectures shifted to a quasi-state of emergency, which carries fewer restrictions on business activity and targets high-risk areas rather than entire prefectures.

Ideas:

Yes, agreed, the pandemic still has a severe impact on the Japanese economy, and yes, there are areas or parts of the economy that are beginning to increase.

The manufacturing industry probably is almost back to normal, except for the so-called semiconductor chip shortage, as Japanese exports in recent months are reaching new levels.

But the services sector is still not where is should be and especially specific parts of the industry such as tourism, restaurants, hotels and so on.

Of course not allowing international tourists into Japan for the Olympics has further hurt the services industry.

And even not allowing Japanese spectators in the events in and around Tokyo is going to hurt the services industry even more.

Article:

The office polled 2,050 workers from June 25 to 30, of whom 1,820, or 88.8 percent, responded.

Under the virus emergency, people are asked to stay home and restaurants and bars serving alcohol to suspend operations. Dining establishments not offering alcohol are requested to close early.

"Sentiment in the food service industry is still at a low level, but it significantly rose as the virus emergency ended in many areas," a government official told reporters.

Ideas:

Its understandable that the government wants to limit the spread of the virus situation by limiting alcohols in restaurants.

But at the same time, these restaurants should be compensated for their losses as much as possible.

The food services industry is going to take a while to come back. But how many small and medium sized food service companies are going to go out of business before the industry gets back to some kind of "new normal."

The Japanese government and the Bank of Japan should do all they can to help food service businesses and try to prevent as many as possible from closing. 

Now is not the time for the idea of "let the market decide" on who survives the pandemic and who goes under.

Article:

In addition, the official said progress in the government's COVID-19 vaccine rollout has improved sentiment.

A department store worker in the Kinki region in western Japan was quoted as saying, "Sales increased as the operating hours were extended following the end of the virus emergency and customers enjoy shopping and dining out."

In June, the diffusion index gauging business sentiment regarding the coming months rose 4.8 points from the previous month to 52.4, following a 5.9 point growth in May. It topped 50 for the first time since February.

Ideas:

The vaccine rollout of course is going to improve sentiment, but it seems in recent weeks the supply challenges have returned. 

And most likely the vaccine challenges are going to cause further challenges throughout the summer and fall.

Yes, people want to get out and enjoy themselves and try to get back to some kind of normalcy in their lives, through shopping and dining out.

An increase of the diffusion index to 52.4 sounds good but its a very volatile index, meaning it can go up and down very easily. 

And a reading of 52.4 doesn't mean now everyone is happy are going to get back to "business as usual" as indexes can never 100 percent predict what people or businesses are really going to do in the future.

Article:

A hotel worker in central Japan's Tokai region expected the upcoming Tokyo Olympics and the progress of vaccination will "change the mood."

The sporting event is set to open on July 23 after a one-year postponement due to the pandemic, but games will highly likely be held without spectators at venues in the capital due to a recent spike in virus cases.

Ideas:

Yes, the Olympic games might be some kind of "change in mood", but at what level and how much because of the ban on foreign tourists and the ban on Japanese spectators at venues in Tokyo and the Kanto region.

And if restaurants are not allowed to serve alcohol or even allowed to have large groups gather the change in mood might not be that great.

Of course maybe some hotels and places in Tokyo that have some teams or officials staying there might help some but its still not as much as needed.

And the continued worry about the virus situation is not going to help the games and as a result the change in mood might not be that much.

Have a nice day and be safe!