Poll claims Japanese economy improving

Industries on the frontlines of Japan's recession say business is getting better, an official survey showed today.

Industries on the frontlines of Japan's recession say business is getting better, an official survey showed today.

But the grassroots poll of 2,000 service-oriented businesses taken by the Cabinet Office in late April showed pessimists still overwhelmed optimists, with many respondents complaining shoppers are reluctant to spend on expensive goods.

The survey is aimed at gauging sentiment among workers in the services industry, considered the most sensitive to changes in business climate.

The survey's diffusion index of current business conditions rose for the sixth straight month to 46.7 from 43.9 in March. The index for expected conditions in the months ahead improved for a fourth month to 48.3 from 44.8. Readings below 50 indicate pessimists outnumber optimists.

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Retailers said new television sets seemed to be selling well in the run-up to the June World Cup soccer matches co-hosted by Japan and South Korea.

The government will release its latest monthly report on Friday, following two straight months of upgrades in its economic view. A source has told Reutersit will show another upgrade.

Economists agree the Japanese economy, which shrank in the last three quarters of 2001, is showing tentative signs of recovery.

But they warn it looks overly dependent on exports and that the revival has yet to filter through to depressed capital expenditure or consumer spending - the key to a sustainable rebound.