The survey of workers such as taxi drivers, hotel workers and restaurant staff - called "economy watchers" for their proximity to consumer and retail trends - showed their confidence over current economic conditions improved 10.1 points from January to 41.3.

The Cabinet Office changed its assessment based on the index, saying the economy remained severe due to the pandemic but was showing some recovery.

(Reporting by Kaori Kaneko; Editing by Ritsuko Ando)