Confidence among major Japanese manufacturers has recovered further after plunging on COVID-19 pandemic woes to its worst level since the global financial crisis, a key survey showed yesterday.
The Bank of Japan’s (BoJ) quarterly poll of about 10,000 firms — known as the Tankan business survey — is month showed a reading of minus-10 among big manufacturers, after recording minus-27 in the previous survey and minus-34 in the June survey.
The latest figure compared with a market consensus estimate of minus-15.
Photo: Reuters
The June figure was the lowest since June 2009 when worldwide financial shocks hammered the planet’s third-largest economy.
The short-term business sentiment survey reports the difference between the percentage of firms that are upbeat and those that see conditions as unfavorable.
A negative reading means more companies are pessimistic than optimistic. It is considered to be the broadest indicator of how Japan Inc is faring.
The latest reading comes after the government last week approved more than US$700 billion in fresh stimulus to fund projects from anti-coronavirus measures to green tech, the country’s third such package this financial year.
“The sharp rebound in the Q4 Tankan supports our view that Japan’s economy will rebound relatively swiftly from the dislocation caused by the pandemic,” Capital Economics Ltd economist Tom Learmouth said in a commentary.
Japan officially exited recession last month after three quarters of contraction, but it now faces a spike in COVID-19 infections, with record numbers of new cases reported in the past few weeks.
The latest survey also comes ahead of the bank’s two-day monetary policy meeting from Thursday, which is widely expected to keep the current monetary easing tools, but also likely to extend its special measures in response to COVID-19.
“We think the BoJ will explain that the economy continues to need policy support, especially with higher uncertainty due to the arrival of a third wave of infections,” UBS economists Masamichi Adachi and Go Kurihara said in a report.
Confidence among big nonmanufacturers improved to minus-5 — against a market consensus of minus-6 — after logging minus-12 in September.
The latest figures show a steady recovery from the low of minus-17 in June, but are still well below the March figure of plus 8.
Japan was struggling with the effects of natural disasters and a hike in consumption tax even before the pandemic crippled the global economy.
Once it hit, there were no mandatory lockdowns in the country, with the government instead asking people to stay at home — a request that was largely heeded.
That, coupled with a shuttering of the country’s borders, battered tourism and consumer spending, with the hospitality industry hit particularly hard.
Taiwan’s long-term economic competitiveness will hinge not only on national champions like Taiwan Semiconductor Manufacturing Co. (TSMC, 台積電) but also on the widespread adoption of artificial intelligence (AI) and other emerging technologies, a US-based scholar has said. At a lecture in Taipei on Tuesday, Jeffrey Ding, assistant professor of political science at the George Washington University and author of "Technology and the Rise of Great Powers," argued that historical experience shows that general-purpose technologies (GPTs) — such as electricity, computers and now AI — shape long-term economic advantages through their diffusion across the broader economy. "What really matters is not who pioneers
In a high-security Shenzhen laboratory, Chinese scientists have built what Washington has spent years trying to prevent: a prototype of a machine capable of producing the cutting-edge semiconductor chips that power artificial intelligence (AI), smartphones and weapons central to Western military dominance, Reuters has learned. Completed early this year and undergoing testing, the prototype fills nearly an entire factory floor. It was built by a team of former engineers from Dutch semiconductor giant ASML who reverse-engineered the company’s extreme ultraviolet lithography (EUV) machines, according to two people with knowledge of the project. EUV machines sit at the heart of a technological Cold
TAIWAN VALUE CHAIN: Foxtron is to fully own Luxgen following the transaction and it plans to launch a new electric model, the Foxtron Bria, in Taiwan next year Yulon Motor Co (裕隆汽車) yesterday said that its board of directors approved the disposal of its electric vehicle (EV) unit, Luxgen Motor Co (納智捷汽車), to Foxtron Vehicle Technologies Co (鴻華先進) for NT$787.6 million (US$24.98 million). Foxtron, a half-half joint venture between Yulon affiliate Hua-Chuang Automobile Information Technical Center Co (華創車電) and Hon Hai Precision Industry Co (鴻海精密), expects to wrap up the deal in the first quarter of next year. Foxtron would fully own Luxgen following the transaction, including five car distributing companies, outlets and all employees. The deal is subject to the approval of the Fair Trade Commission, Foxtron said. “Foxtron will be
INFLATION CONSIDERATION: The BOJ governor said that it would ‘keep making appropriate decisions’ and would adjust depending on the economy and prices The Bank of Japan (BOJ) yesterday raised its benchmark interest rate to the highest in 30 years and said more increases are in the pipeline if conditions allow, in a sign of growing conviction that it can attain the stable inflation target it has pursued for more than a decade. Bank of Japan Governor Kazuo Ueda’s policy board increased the rate by 0.2 percentage points to 0.75 percent, in a unanimous decision, the bank said in a statement. The central bank cited the rising likelihood of its economic outlook being realized. The rate change was expected by all 50 economists surveyed by Bloomberg. The
RSS