Japan Economy Watcher Sentiment: Updated Dec. 24.

 https://mainichi.jp/english/articles/20211208/p2g/00m/0bu/049000c

Article:

TOKYO (Kyodo) -- Business sentiment among workers with jobs sensitive to economic trends in Japan rose in November for the third straight month, as confidence among eateries climbed to a record high after the latest coronavirus state of emergency was lifted, government data showed Wednesday.

The diffusion index of confidence in current conditions compared with three months earlier among "economy watchers," such as taxi drivers and restaurant staff, edged up 0.8 point from October to 56.3, according to the Cabinet Office.

The reading compared with a gain of 13.4 points in October, the biggest monthly improvement since June last year, as a months-long state of emergency under which people were requested to stay at home and restaurants to close early was fully lifted on Oct. 1.

Ideas:

Its good that "economy watchers" are feeling better about what is going on with their jobs and their businesses. But even though or many are feeling better, what can be said for everyone who might be so-called "economy watchers"

As in a normal market economy, there are always going to be some positives and some negatives, meaning not all businesses will be positive as some will do better than others.

Hopefully, the current or new virus situation is not going to be a cause for alarm or cause consumers to shrink back from getting out and about and participating in the economy, meaning of course spending the extra income they have.

As as we head in into the Christmas/holiday period including the New Year week long holiday period consumers will be out and about and not worry too much about the current virus situation.

Article:

A reading above 50 indicates that more respondents feel conditions are improving rather than worsening. The office polled 2,050 workers from Nov. 25 to 30, of whom 1,828, or 89.2 percent, responded.

The office upgraded its assessment of the economy for the third consecutive month, saying, "The economy is picking up though concerns remain over the coronavirus pandemic."

In the previous month, the office said the economy was recovering "gradually."

Ideas:

The economy might be picking up but there might still be areas which are not where they should be.

For example how about the hotel or accommodation industry? While I survey hotels in the Tokyo and Yokohama area and see occupancy rates are up, they might not be up for all hotels or even near where they were, for example in December of 2019, before the pandemic.

Hotel employees can definitely be called "economy watchers" too. One hotel chain, in the business hotel category, seems to have completely re-tooled its daily and weekly offerings. For example they are offering plans or discounts for the under 35 age groups and offering weekly stay discounts, and a lot more offerings compared to just the single, double, and twin offerings that many hotels still have or used to have in order to survive and or meet the needs and demands of today's consumers.

The economy may be recovering gradually but this of course has been said many times before with good reasons. But as the omicron virus begins to spread globally and now in Japan, is the Japanese economy going to remain on the recovery path.

Most likely in the holiday season and the New Year week long period, the economy will see a of consumer spending. But the challenge is after the New Year period and what is going to happen if the virus situation gets worse in Japan.

Article:

Sentiment among eateries improved for the third month in a row, with the diffusion index hitting 68.2, up 3.1 points and marking the highest level since comparable data became available in 2002.

Confidence among retailers fell 0.4 point to 53.7, down for the first time in three months, as some people apparently went out to eat rather than shop in supermarkets and cook at home, a Cabinet Office official said, while noting the figure was still above the boom-or-bust line.

Looking ahead, the diffusion index gauging business sentiment in the coming months fell 4.1 points from the previous month to 53.4, down for the first time in three months in Japan.

Ideas:

Hopefully the sentiment among eateries will continue to improve through the holiday period but what is going to happen when the holiday period ends.

Perhaps for some or many, they are tired of eating at home and now want to go out and eat when they've maybe been stuck at home for up to 18 months. 

And then there is the idea that maybe now, for some or many, supermarket prices are beginning to get too high and its easier and cheaper now to go out to a restaurant, before the restaurants too increase their prices.

Brick and mortar retailers, or stores now have to contend with online shopping as maybe some consumers prefer to shop/buy online instead of going to a crowded Sogo or Takashimaya for example.

As to why the business sentiment fell 4.1 points to 53.4 might be a when some parts of the article say the economy is headed for a recovery. Again an economy very complex and as such not all businesses or industries are going to feel the same or have the same sentiment.

Some might feel better about the economy like restaurants while others might not feel so good such as retailers, and so on. Consumers may not be out and about but that doesn't mean that now all businesses are going to see the benefits of more consumers doing things.

The pandemic most likely has changed the habits of many consumers as to what they used to do before the pandemic compared to what they do now. Or at least for the time being or permanently, as only time will tell.

Have a nice day and be safe!