A man works at a factory in the Keihin Industrial Zone in Kawasaki City (February 28, 2017, Reuters/Issei Kato/File photo) Obtaining license rights
TOKYO, Sept 13 (Reuters) – Confidence in Japan’s major manufacturers has fallen the most in eight months, raising concerns that China’s economic slowdown could become an even bigger drag on global and domestic growth. A Reuters survey found that morale in the service sector has declined since then. It aired on Wednesdays in September.
The gloom across the business sector highlights challenges for Japan’s policymakers, raising questions about whether exports can spur economic recovery in the face of weak domestic demand.
In the Reuters Tankan monthly poll of 502 major manufacturing companies, the sector’s sentiment index was at +4, a significant drop from +12 in August. This was the biggest decline since January, when the index fell 14 points.
The survey received 248 responses between August 30 and September. 8 will serve as a leading indicator for the Bank of Japan’s quarterly Tankan survey scheduled for October 2, and will also serve as a quick check on the health of the economy ahead of the Bank of Japan’s upcoming policy meeting. .
In written comments, many Japanese companies complained about soaring raw material input costs and weak domestic and international demand. The war in Ukraine and rising tensions between the United States and China are also seen as headwinds.
The manager of a machinery manufacturer stated in a research report, “Our business situation is not very good due to uncertainties surrounding the global economy, including geopolitical risks stemming from the protracted war in Ukraine and rising tensions between the United States and China.” said.
“Overseas markets are weak, especially China, and domestic demand is weak,” a manager at a chemical manufacturer wrote on condition of anonymity.
The manufacturing sentiment index (calculated by subtracting the percentage of pessimistic respondents from optimistic respondents) is 4 points lower than three months ago, suggesting a decline in the quarterly Tankan survey.
A positive number means optimists outnumber pessimists.
According to the survey, the Reuters Tankan Non-Manufacturing Index also fell 9 points from the previous month to +23 in September, marking the steepest decline since May 2020.
The service sector index for the quarter fell 1 point from June, indicating a slight decline in the Bank of Japan’s quarterly Tankan.
Outlook indicators also suggested business conditions could remain challenging for the rest of the year. Looking at business conditions for the next three months, the manufacturing industry index was flat in December, and the service sector index had fallen slightly to +21 at the end of the year.
Interview: Satoshi Kajimoto Editing: Shri Navaratnam
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