-- The Middle East war and rising oil prices undercut confidence of Japan's frontline service workers in March, reported the Cabinet Office on Wednesday.
The nation's Economy Watchers Survey index fell to 42.2 in March from 48.9 in February, striking the lowest level since February 2022.
The monthly Japan Economy Watchers Survey measures the economic sentiment of workers in consumer-facing industries, such as taxi drivers, hotel staff, and restaurant employees.
A survey index reading above 50 indicates optimism among workers, while a reading below 50 points to pessimism.
The Economy Watchers survey is conducted from the 25th to the 30th of each month.
The Economy Watchers Survey Outlook index in Japan decreased to 38.7 points in March from 50 in February, sinking to the lowest reading since December 2020.
The view of the economy watchers indicated in the March survey is that "the economy shows weakness in the recent recovery movements, influenced by the downward pressure on sentiment due to the Middle East situation," reported the Cabinet Office.
The Economy Watchers Survey is somewhat at odds with Japan's service-sector purchasing managers index (PMI), which struck 53.4 in March, down from 53.8 in February, but still well above the 50-mark that separates growth from contraction, reported S&P Global.
The S&P Global survey was conducted from March 11 through 25, a period preceding the Economy Watcher Survey, possibly suggesting the mood in the service sector soured as the Middle East war remained unresolved.