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.
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday obtained the government’s approval to inject an additional US$7.5 billion into its US subsidiary, the Department of Investment Review said in a statement. The department approved TSMC’s application of investing in TSMC Arizona Corp, which is engaged in the manufacturing, sales, testing and design of IC and other semiconductor devices, it said. The latest capital injection follows a US$5 billion investment for TSMC Arizona approved in June. The chipmaker has broken ground on two advanced fabs in Arizona with aggregated investments approved by the department totaling US$24 billion thus far. According to TSMC, the first Arizona
The lethal hack of Hezbollah’s Asian-branded pagers and walkie-talkies has sparked an intense search for the devices’ path, revealing a murky market for older technologies where buyers might have few assurances about what they are getting. While supply chains and distribution channels for higher-margin and newer products are tightly managed, that is not the case for older electronics from Asia where counterfeiting, surplus inventories and complex contract manufacturing deals can sometimes make it impossible to identify the source of a product, analysts and consultants say. The response from the companies at the center of the booby-trapped gadgets that killed 37
FRIENDLY TAKEOVER: While Qualcomm Inc’s proposal to buy some or all of Intel raises the prospect of other competitors, Broadcom Inc is staying on the sidelines Qualcomm Inc has approached Intel Corp to discuss a potential acquisition of the struggling chipmaker, people with knowledge of the matter said, raising the prospect of one of the biggest-ever merger and acquisition deals. California-based Qualcomm proposed a friendly takeover for Intel in recent days, said the sources, who asked not to be identified discussing confidential information. The proposal is for all of the chipmaker, although Qualcomm has not ruled out buying some parts of Intel and selling off others. It is uncertain whether the initial approach would lead to an agreement and any deal is likely to come under close antitrust scrutiny
SECURITY CONCERNS: The proposed ban on Chinese autonomous vehicle software and hardware would go into effect with the 2027 and 2030 model years respectively The US Department of Commerce today is expected to propose prohibiting Chinese software and hardware in connected and autonomous vehicles on US roads due to national security concerns, two sources said. US President Joe Biden’s administration has raised concerns about the collection of data by Chinese companies on US drivers and infrastructure as well as the potential foreign manipulation of vehicles connected to the Internet and navigation systems. The proposed regulation would ban the import and sale of vehicles from China with key communications or automated driving system software or hardware, said the two sources, who declined to be identified because the