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Japan economy watcher sentiment improves in Aug. as heat boosts sales

TOKYO (Kyodo) -- Business confidence among workers with jobs sensitive to economic trends improved in August as high temperatures boosted economic activity, government data showed Monday.

The diffusion index of sentiment among "economy watchers" such as taxi drivers and restaurant staff stood at 48.7, climbing 2.1 points from July, according to a survey by the Cabinet Office.

The office upgraded its assessment for the first time since March, saying sentiment "continues to be in a moderate recovery," removing a reference to a lull.

A reading below 50 indicates that more respondents reported worsening conditions than improving conditions over the previous three months.

Meteorologists have called this summer one of the hottest on record and many respondents said the heat wave that continued into August was positive for business, with restaurants citing a rise in drink and dessert orders, and department stores pointing to strong sales of warm weather clothing.

The negative impact of torrential rain in western Japan that caused massive flooding and killed more than 220 people the previous month also appeared to have worn off, but a typhoon that tore across the country and a strong earthquake in Hokkaido could dent sentiment again in September.

The index gauging the economic outlook in the coming months improved to 51.4, up 2.4 points from the previous month.

The office polled 2,050 workers from Aug. 25 to Aug. 31, of whom 1,861, or 90.8 percent, responded.

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