This May 18, 2021 photo taken from a Mainichi Shimbun helicopter shows skyscrapers in Tokyo's Marunouchi business district. (Mainichi)

       TOKYO (Kyodo) -- A key index reflecting the state of the Japanese economy marked its sharpest fall in 15 months in August, due to sluggish car output hit by a global semiconductor shortage, government data showed Thursday.

       The Cabinet Office's coincident index of business conditions for the reporting month fell 2.9 points from July to 91.5 against the 2015 base of 100. It is the biggest decline since the 7.1 point drop logged in May last year, when Japan was under its first COVID-19 state of emergency.

       Although the index fell for the second consecutive month, following a 0.2 point decrease in July, the office maintained its assessment that the domestic economy is "improving," employing the most optimistic expression in its five-level evaluation for the sixth month in a row.

       A government official told reporters that the indices representing levels of industrial output and shipments dropped with the auto industry bearing the brunt of the chip crunch. A shortage of car parts due to factory shutdowns in Southeast Asian nations caused by surges in coronavirus infections also had an effect.

       The index for retail sales also fell, with the official saying those of convenience stores were poor as people refrained from going out amid a resurgence of the virus.

       The leading index of business conditions, which forecasts the situation in the coming months, for August also posted a second successive monthly decline, down 2.3 points to 101.8.

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