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Japan's Eco Watchers Index Improves at Softer Rate of Pessimism in July

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Economic sentiment among Japan's street-level workers improved at a slower pace in July, with the headline Eco Watchers Survey's current conditions index rising 1.7 points to 45.7 from 44.0 in June, according to data released by the Cabinet Office on Monday.

The reading measures the economic mood of workers closely tied to consumer and business activity, such as taxi drivers, hairdressers, and restaurant staff. A reading above 50 indicates optimism, while a reading below suggests pessimism.

The latest print beat the consensus forecast of 44.6 points tracked by Investing.com.

The monthly improvement was driven by gains in household activity-related conditions, as the food and beverage segment improved.

The corporate activity-related index also rose, supported by gains in non-manufacturing industries, while the employment-related index increased.

Looking ahead, the Cabinet Office said the economy showed signs of recovery, although uncertainty surrounding the Middle East situation remained, with concerns over continued price increases and the impact of the 2026 Kumamoto earthquake also clouding the outlook.

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