Japan's Economy Watchers Survey reveals upbeat outlook

Japan's monthly Economy Watchers Survey (EWS) showed the service sector sentiment improved considerably in the last month.

According to the Cabinet Office, the Economy Watchers Current Index, which determines the sentiment among workers regarding economic activity, rose to 48.4 in February from 44.3 in January, the first rise in two months.

The current conditions component of February's Economy Watchers Survey (EWS) was even more upbeat than the improvement signaled by the outlook in the previous month, Capital Economics analysts wrote in a note.

The EWS polls more than 2,000 people holding jobs that enable them to observe economic activity in three areas: household spending, corporate activity and employment.

The EWS therefore supports the message from other surveys that the unemployment rate will fall a little further in the coming months, although the stagnation in real wages means that this is unlikely to translate into a strong recovery in consumer spending, Capital Economics said.