Confidence among Japanese manufacturers hit a near three-year low in the final months of this year, a Bank of Japan (BOJ) survey showed yesterday, adding to concerns about the already weak economy.
The central bank’s quarterly tankan survey came just days after official figures showed the world’s third-largest economy shrank in the July-September period, buffeted by a weak global outlook, a strong yen and a spat with China.
It also comes ahead of national polls tomorrow that are expected to see Japanese Prime Minister Yoshihiko Noda ousted in favor of Shinzo Abe, who has promised to press more aggressively for a looser monetary policy.
Photo: Reuters
The worst tankan results since the start of 2010 would likely heap pressure on Japan’s central bank to step up its economic offensive at a policy meeting next week, analysts said.
“Pressure on the Bank of Japan for more monetary easing will inevitably increase,” said Tsuyoshi Ueno, senior economist at NLI Research Institute in Tokyo.
“The survey showed manufacturers are seriously concerned about the economy,” Ueno said.
Sentiment among large manufacturers, including automakers and technology companies, plunged to minus-12 from minus-three in the third quarter. Economists had expected a reading of minus-10.
The survey of more than 10,000 firms shows the percentage of companies saying business conditions are good minus those saying they are bad, and are a key measure used by the BOJ in formulating monetary policy.
“The survey suggested that there remains the risk that the expected economic recovery the BOJ assumes could come even later than the central bank is currently envisaging,” Credit Agricole economist Yoshiro Sato said.
Also yesterday, revised official data showed that Japan’s factory output rose 1.6 percent in October, slightly down from a preliminary 1.8 percent expansion.
The expansion in industrial production data had marked a glimmer of hope among a batch of otherwise gloomy economic figures.
The tankan also offered some positive news, with large Japanese firms planning to boost their capital spending by 6.8 percent on-year through March, suggesting they see a pickup in the economy going into next year.
The index for large, non-manufacturers such as real estate and telecoms firms also stayed in positive territory in the survey.
The BOJ has launched two major policy easing measures since September after its counterparts in the US and Europe also took steps to fight a slowdown in the global economy.
However, critics, notably among them Abe, have called on the BOJ to take a more aggressive stance to spur growth.
Abe, head of the main opposition Liberal Democratic Party and a former prime minister, has repeatedly vowed to press the bank on the issue if he is elected to Japan’s top political job.
Abe’s comments and expectations he will be successful helped send the yen tumbling against the US dollar and the euro.
In forex trade, the US dollar was at ¥83.71, from ¥83.64 in New York late on Thursday. The euro bought US$1.3110 and ¥109.79, against US$1.3073 and ¥109.38 in US trade.
Tokyo stocks finished mixed yesterday ahead of weekend elections. The benchmark Nikkei 225 was flat, dipping 5.17 points to 9,737.56, while the Topix of all first-section shares gained 0.23 percent, or 1.83 points, to 801.04.
MULTIFACETED: A task force has analyzed possible scenarios and created responses to assist domestic industries in dealing with US tariffs, the economics minister said The Executive Yuan is tomorrow to announce countermeasures to US President Donald Trump’s planned reciprocal tariffs, although the details of the plan would not be made public until Monday next week, Minister of Economic Affairs J.W. Kuo (郭智輝) said yesterday. The Cabinet established an economic and trade task force in November last year to deal with US trade and tariff related issues, Kuo told reporters outside the legislature in Taipei. The task force has been analyzing and evaluating all kinds of scenarios to identify suitable responses and determine how best to assist domestic industries in managing the effects of Trump’s tariffs, he
TIGHT-LIPPED: UMC said it had no merger plans at the moment, after Nikkei Asia reported that the firm and GlobalFoundries were considering restarting merger talks United Microelectronics Corp (UMC, 聯電), the world’s No. 4 contract chipmaker, yesterday launched a new US$5 billion 12-inch chip factory in Singapore as part of its latest effort to diversify its manufacturing footprint amid growing geopolitical risks. The new factory, adjacent to UMC’s existing Singapore fab in the Pasir Res Wafer Fab Park, is scheduled to enter volume production next year, utilizing mature 22-nanometer and 28-nanometer process technologies, UMC said in a statement. The company plans to invest US$5 billion during the first phase of the new fab, which would have an installed capacity of 30,000 12-inch wafers per month, it said. The
Taiwan’s official purchasing managers’ index (PMI) last month rose 0.2 percentage points to 54.2, in a second consecutive month of expansion, thanks to front-loading demand intended to avoid potential US tariff hikes, the Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) said yesterday. While short-term demand appeared robust, uncertainties rose due to US President Donald Trump’s unpredictable trade policy, CIER president Lien Hsien-ming (連賢明) told a news conference in Taipei. Taiwan’s economy this year would be characterized by high-level fluctuations and the volatility would be wilder than most expect, Lien said Demand for electronics, particularly semiconductors, continues to benefit from US technology giants’ effort
‘SWASTICAR’: Tesla CEO Elon Musk’s close association with Donald Trump has prompted opponents to brand him a ‘Nazi’ and resulted in a dramatic drop in sales Demonstrators descended on Tesla Inc dealerships across the US, and in Europe and Canada on Saturday to protest company chief Elon Musk, who has amassed extraordinary power as a top adviser to US President Donald Trump. Waving signs with messages such as “Musk is stealing our money” and “Reclaim our country,” the protests largely took place peacefully following fiery episodes of vandalism on Tesla vehicles, dealerships and other facilities in recent weeks that US officials have denounced as terrorism. Hundreds rallied on Saturday outside the Tesla dealership in Manhattan. Some blasted Musk, the world’s richest man, while others demanded the shuttering of his