Japan’s Economy Watcher Index Slips in October; Outlook Fades

Summary

• Japan's economy watchers index slipped to a 46.1 diffusion reading in October from 47.0 in September.
• Five of the nine index components were weaker in October, while assessments for eating and drinking places, corporations, and nonmanufacturers improved.
• Nonmanufacturers showed substantial improvement from September to October.
• Over three months and six months, the index shows point-to-point improvement, but the 12-month change declined by 2.1 points for the headline.
• The current index has a 41.9 percentile standing, which is below its historic median.
• Four components have readings above the 50th percentile: eating and drinking places at 77.9, services at 63.6, nonmanufacturers at 59.7, and corporations at 51.4.
• The future economy watchers index slipped to 46.5 in October from 47.4 in September.
• Three of the nine future index components improved in October: eating and drinking places, services, and manufacturers.
• The three-month change in the future index increased by 0.7 points, while the six-month change rose by 7.1 points.
• The year-over-year change for the future index is lower by 5.7 points.
• Over three months, the future index shows deterioration in retailing and employment, with the other seven components improving.
• The six-month change for the future index shows positive results across all sectors, with the smallest improvement being a 4.9-point increase in retailing.
• The largest improvement in the six-month future index change is a 10.6 diffusion point gain for manufacturers.
• The future index headline has a 37.5 percentile standing, with all components except one posting standings below the 50-percentile mark.
• Both the current and future indexes are below their medians and lower year-on-year, though both are creeping higher over three months and six months.