Japan: Current, future DIs both fall – Nomura

Analysts at Nomura note that the current conditions DI in the July Economy Watchers Survey fell 1.5 m-m to 46.6, below the 50 level that marks the threshold between economic improvement and deterioration for the seventh consecutive month.

Key Quotes

“The household activity-related, corporate activity-related, and employment-related DIs all fell. In regard to the household activity-related and corporate activity-related DIs, many respondents commented about the negative impact of a decline in customer footfall as a result of the summer heatwave, but the hot weather did not purely have a negative impact, with some respondents pointing to a boost to demand for products such as beverages.”

“There was also record heavy rainfall in western Japan in the early part of July, and some respondents noted the negative impact on the tourism and distribution industries, mainly in the Chugoku region.”

“The future conditions DI fell 1.0 to 49.0, below the 50 level that marks the threshold between economic improvement and deterioration for the first time in two months. Some respondents noted damage from heavy rainfall and the protracted impact of the heatwave, with a number of them taking a cautious stance on future economic recovery.”