Japan's economy watchers rated the present better for a third month, and the Cabinet Office added the Kumamoto earthquake to its outlook line
The sentence changed.
Every month the Cabinet Office closes its Economy Watchers Survey with one line summarising how the people it polls read the economy. In June that line said the outlook carried expectations that uncertainty from the Middle East situation would ease. The version published on Monday afternoon in Tokyo says the uncertainty remains, and adds that concern is also visible about the impact of the 2026 Kumamoto earthquake.
The numbers underneath moved the other way, at least the ones describing the present.
The present improved and the outlook did not
At 45.7, seasonally adjusted, the current conditions index was 1.7 points above June and rising for a third consecutive month. All three components rose. Household activity reached 45.4, corporate activity 46.6, employment 46.1. The strongest single mover in the survey was food and drink, which gained 5.7 points to 47.5 and is now the highest of the household sub-series in the table.
The forward-looking index gained 0.1 point, to 45.8. It had gained 5.0 the month before. Household activity did not move at all. Food and drink, the component that carried the current reading, went the other way on the outlook and fell 3.1 points to 42.9, which is the largest fall among the national components. Manufacturing fell 0.6 point to 45.4.
Fifty is not a convention
Fifty is not a pass mark somebody chose. The survey polls 2,050 people picked for jobs that let them watch local activity, and the Cabinet Office weights their five possible answers: better counts 1, somewhat better 0.75, unchanged 0.5, somewhat worse 0.25 and worse 0. A panel answering unchanged to a person prints exactly 50. In July, on the unadjusted series, 50.8 percent said conditions were unchanged, 18.0 percent said better or somewhat better, and 31.2 percent said worse or somewhat worse. Those shares produce 45.8.
Nine regions up, three down
Nine of the twelve regions improved on the current reading. Three fell. Shikoku rose the most, up 7.5 points to 49.5, and Hokkaido fell the most, down 0.8 to 45.3, which is a spread of more than eight points between the best and the worst monthly move. Okinawa, at 56.6, is the only region in the country reading above 50, and Shikoku at 49.5 is the closest any other comes. On the outlook eight regions rose and four fell: Hokuriku gained 4.2 points, Hokkaido gave up 4.3, and Okinawa gave up 4.0 to 48.2.
The region where an earthquake effect would show first did not move down. Kumamoto prefecture sits inside the Kyushu block, and Kyushu improved on both measures, by 0.1 point to 45.8 on current conditions and by 0.5 to 49.0 on the outlook, which is the highest outlook reading of the twelve. The concern the Cabinet Office records is in the written responses it collected. It is not yet in the arithmetic those responses produce.
