Con­fi­dence of Ja­pan’s big man­u­fac­tur­ers at 3-year low

The Sun (Malaysia) - - SUNBIZ -

TOKYO: Busi­ness con­fi­dence among Ja­pan’s largest man­u­fac­tur­ers is at its low­est since Tokyo in­tro­duced mea­sures to kick-start the strug­gling econ­omy more than three years ago, a cen­tral bank sur­vey showed yes­ter­day.

The Bank of Ja­pan’s (BoJ) closely watched Tankan re­port comes after data show­ing weak growth in the sec­ond quar­ter and as soft in­fla­tion and spend­ing fig­ures on Fri­day un­der­scored the wob­bly re­cov­ery.

The lat­est Tankan – a key gauge of Ja­pan Inc’s health – missed mar­ket fore­casts for a slight im­prove­ment in the mood among ma­jor firms.

Sen­ti­ment among big man­u­fac­tur­ers is wal­low­ing at its low­est lev­els since Prime Min­is­ter Shinzo Abe kicked off his growth blitz, dubbed Abe­nomics, in 2013.

The sur­vey con­tra­dicts Tokyo’s view that the world’s num­ber three econ­omy is on the up­swing, said Satoshi Osanai, se­nior econ­o­mist at Daiwa In­sti­tute of Re­search.

“The econ­omy is weak and cer­tainly not in a re­cov­ery mode,” he added.

“This is more con­fir­ma­tion that Ja­panese firms are fac­ing head­winds. Con­di­tions re­main tough.”

The BoJ’s quar­terly sur­vey of more than 10,000 com­pa­nies is the most com­pre­hen­sive in­di­ca­tor of how Ja­pan is far­ing. It marks the dif­fer­ence be­tween the per­cent­age of firms that are up­beat and those that see con­di­tions as un­favourable.

The read­ing for big man­u­fac­tur­ers was un­changed at 6.0, while the level for big non­man­u­fac­tur­ers fell to 18 from 19. How­ever, con­fi­dence among medium and small busi­nesses im­proved slightly.

Stock traders were un­fazed. The bench­mark Nikkei 225 in­dex gained 0.90%, or 148.83 points to 16,598.67.

Of­fi­cials are un­der in­tense pres­sure to de­liver a boost to the econ­omy with ex­perts in­creas­ingly writ­ing off Tokyo’s spend-for­growth pol­icy.

On Fri­day, of­fi­cial data showed spend­ing among Ja­panese house­holds tum­bled in Au­gust and con­sumer prices fell again – putting the BoJ’s 2.0% in­fla­tion tar­get fur­ther out of reach. The tar­get is a cor­ner­stone of Abe’s fal­ter­ing at­tempts to kick­start growth. – AFP

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