Since January 2000 the government has been publishing its Economy Watchers Survey, based on interviews of small-business people who feel the effects of changes in the economy directly - people "on the street" like taxi drivers, convenience-store managers, and bar managers. According to the March 2002 survey, the diffusion index (an indicator of the current state of the economy in comparison with three months before) stood at 43.9, 10.8 points better than the previous month's survey. This is a considerable improvement. Although the index had been improving for five months, the increments were very small. The March improvement is the largest so far. Japan's economy has had an extended period of hibernation - people are now hoping that spring is about to arrive.

Fewer Think Economy Will Get Worse
A diffusion index score of 50 means the economy is neither improving nor deteriorating. An index of 43.9, therefore, means the majority view is still that the economy is not in good shape. At the same time, compared with the January 2002 survey the weight of opinion that the economy has deteriorated has halved, while the view that the situation is somewhat improved has more than doubled. There is just a little further to go before the Japanese economy's head gets above water.

Some economy watchers gave the following as evidence that the economy is on the turn:

• Although tours to Okinawa (which require traveling by air) declined significantly after the September 11 terrorist attacks in the United States, they are regaining popularity. (Travel agent in Hokkaido)
• Because of the mild winter, sales of spring apparel are picking up early, and it is particularly noticeable that higher-priced items are selling well. (Clothing shop in Shikoku)
• New products, such as television sets with plasma or liquid-crystal screens, personal computers, and DVD players, are selling well. (Mass-sales outlet of domestic electrical appliances in the south Kanto area)
• In the run-up to the new business year starting in April, demand for temporary staff began to recover. (Temporary-staff agency in the Kyoto-Osaka area)
  
  

Others, however, cited reasons for believing that the situation had deteriorated:

• Although new car models have come on the market, the number of people visiting showrooms was lower than during the same month the year before. (Car dealer in the Hokuriku area)
• Demand for employees in the electrical-parts and clothes manufacturing sectors and the construction industry has shown a further decrease. (Employment bureau in the Chugoku area)

Government Sees Upturn in Economy
Economy watchers in the street have the feeling that things are improving on the economic front overall, and the government too has revised its official forecasts upward. The Monthly Economic Report for April 2002, presented by the Cabinet Office at the April meeting of cabinet ministers responsible for economic affairs, judges that "while the economy continues to be in a difficult situation, it is showing movement towards bottoming out." This is clearly an "upward revision" when compared with the March report, which stated that "while the economy continues to remain in a difficult situation, signs of bottoming out can be seen in some areas."

World Cup to Provide Economic Stimulus
Japan and South Korea are co-hosts of the 2002 FIFA World Cup, which starts on May 31 and lasts a month. Thirty-two of the matches, including the final in Yokohama on June 30, will be held in Japan. If the Japanese team is eliminated in the preliminary stage, Dentsu Institute for Human Studies and the Institute for Social Engineering expect that the event will generate, excluding construction investment, ¥790 billion ($6.08 billion at ¥130 to the dollar) for the economy. If Japan gets into the last eight, they expect the amount to be ¥850 billion ($6.54 billion), and if Japan wins the competition, the forecast is ¥1,000 billion ($7.69 billion). It is also hoped that the United States and Asian economies will improve, thus giving a fillip to Japanese exports. At the same time, while there are not a few causes for concern, including the slow pace of recovery of Japan's financial system, an increasing number of economists are convinced that Japan's economy is on the path to recovery.