Business confidence fell among Japan’s largest manufacturers for a third straight quarter, a closely watched survey showed yesterday, defying analyst expectations for a rise in sentiment.
The Bank of Japan’s Tankan survey showed that major manufacturers are much more upbeat than during the gloomiest days of the COVID-19 pandemic.
However, inflation, including higher energy prices fueled by the war in Ukraine, has weighed on business confidence this year, analysts said.
Photo: Reuters
The quarterly survey, considered to be the broadest indicator of how Japanese businesses are faring, showed confidence among large manufacturers at plus eight, down slightly from the previous reading of plus nine.
A positive figure means more manufacturers see business conditions as favorable than those that consider them unfavorable.
The reading has been falling since April after nearly two years of improving sentiment, which had plunged to minus-34 in June 2020 as COVID-19 restrictions pummelled the economy.
“While soaring material and energy prices continued to weigh on business sentiment, an easing supply crunch due to the lifting of Shanghai lockdowns would provide a boost,” NLI Research senior economist Tsuyoshi Ueno said yesterday ahead of the survey’s release.
Among large non-manufacturers, business confidence improved slightly to 14 from a previous reading of 13, the Tankan showed.
Inflation in Japan hit a seven-year high of 2.8 percent in August for items excluding fresh produce, although that figure is much less steep than in many other countries.
The yen has also hit 24-year lows against the US dollar in recent weeks, prompting an intervention last month by the government, which is also preparing another round of stimulus measures to boost the world’s third-largest economy.
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