Japan's domestic spending propped up by wages and tourism

Severe worker shortage lingers as a downside risk

20241001N Ginza

International tourists cross the street in Tokyo's upscale Ginza district. (Photo by Makoto Okada)

YUMIKO OSHIMA, Nikkei staff writer

TOKYO -- Domestic consumption in Japan is showing signs of recovering from the effects of inflation, according to quarterly economic data released Tuesday, though the persistent shortage of workers remains a downside risk.

In the September edition of the Bank of Japan's Tankan survey of business sentiment, the category for accommodations, eating and drinking services had a diffusion index of 52, matching the record high reached in March. The diffusion index in the retail sector climbed 9 points from the June survey to 28.

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