JAPAN’S service sector sentiment index in October rose to its highest level in nearly eight years after state-of-emergency curbs were eased last month and new COVID-19 cases slid.

The economy watchers’ index advanced 13.4 points to 55.5 in October, the highest level since January 2014, the government data showed yesterday. It was the second straight month of increase and marked the biggest gain since June 2020.

The index is based on a survey of workers such as taxi drivers, hotel workers and restaurant staff who are called “economy watchers” for their proximity to consumer and retail trends.

The outlook index — based on the watchers’ view of the economy for two to three months ahead — gained 0.9 points in October to 57.5, the highest level since November 2013.

Meanwhile, Japanese wages eked out gains for a seventh straight month in September, an indication that pay is continuing to increase at a gradual pace as the pandemic eases.

Cash earnings for Japan’s workers edged up 0.2 percent compared with a year earlier, the labor ministry reported yesterday.

Whether people can spend more to support the economy will be a key factor for Japan’s recovery as it emerges from a likely contraction last quarter when the country was still in the midst of its fourth state of emergency.

Prime Minister Fumio Kishida has made it his mission to raise wages and support the middle class. He plans to give more tax breaks to firms that follow that directive, and improve the salaries of public sector workers such as nurses, caregivers to the elderly, and kindergarten teachers.

While wages appear to have been improving this year, pay is still measured against the low levels of last year.(SD-Agencies)