Japan's service sector sentiment improves in February, conditions to worsen in coming months

TOKYO, March 8 (Xinhua) -- Sentiment in Japan's service sector improved in February from a month earlier, owing to warmer weather encouraging spending, a cabinet office survey showed Friday.

The monthly Economy Watchers survey's diffusion index, in which a score of more than 50 means people view current economic conditions in a positive light, rose 1.9 points from January to 47.5, marking the first increase in three months, the cabinet office said.

Based on the latest survey, the cabinet office upgraded its assessment of sentiment stating that it "continues to be on a moderate recovery track," from a previous assessment stating that recovery was in a "lull".

Retailers working in fashion and department stores said that warmer weather had prompted consumers to spend on clothes for spring, while those working for real estate firms noted that home sales had increased as buyers were keen to purchase before October's consumption tax hike to 10 percent.

The cabinet office went on to say, however, that conditions in the service sector would worsen in the coming months, with the sentiment index for coming economic conditions dropping 0.5 point from a month earlier to 48.9.

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 include 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.

While the survey showed that sentiment has improved in February, the reading remaining below the boom-or-bust 50 line, means that, overall, more people polled felt conditions had worsened in comparison to the previous three months.

The survey was conducted between Feb. 25 and 28, and polled 2,050 workers across Japan.