Ja­pan firms’ sen­ti­ments worsen: sur­vey

The China Post - - WORLD BUSINESS -

A slow­down in main­land China and weak­ness at home dented Ja­panese firms’ con­fi­dence last quar­ter, a cen­tral bank re­port showed Thurs­day, as tepid data sug­gest the world’s third-largest econ­omy has slipped into re­ces­sion.

The dis­ap­point­ing Tankan sur­vey supplied the latest ev­i­dence that Prime Min­is­ter Shinzo Abe’s growth blitz, dubbed Abe­nomics, was fal­ter­ing, as spec­u­la­tion grows that the Bank of Ja­pan (BOJ) would have to ex­pand its mas­sive as­set­buy­ing plan as early as this month.

“While to­day’s Tankan was not as bad as most had feared, it nonethe­less cor­rob­o­rates other signs that Ja­pan’s eco­nomic re­cov­ery has ground to a halt,” Mar­cel Thieliant from Cap­i­tal Eco­nom­ics said in a com­men­tary.

The sur­vey of more than 10,000 com­pa­nies na­tion­wide found that con­fi­dence among ma­jor man­u­fac­tur­ers wors­ened in the three months through Septem­ber, dip­ping to plus 12, from the last re­port’s plus 15.

The re­port is the most com­pre­hen­sive in­di­ca­tor of how Ja­pan Inc. is far­ing and marks the dif­fer­ence be­tween the per­cent­age of firms that are up­beat and those that see con­di­tions as un­fa­vor­able.

“(The re­sult) re­flects the slow­down in over­seas de­mand, es­pe­cially in the Chi­nese econ­omy,” said Junko Nish­ioka, chief economist at Su­mit­omo Mit­sui Bank­ing Corp.

In one bright spot, sen­ti­ment among non-man­u­fac­tur­ers picked up, which an­a­lysts said may be due to a weak yen draw­ing record num­bers of tourists to Ja­pan.

But they warned that tepid con­sumer spend­ing at home was a red flag.

“The im­por­tant thing is how much do­mes­tic de­mand is go­ing to in­crease go­ing for­ward,” Nish­ioka said.

“In that re­spect, I think we should not be too much op­ti­mistic about the prospects for fu­ture busi­ness con­fi­dence.”

The re­port come a day af­ter gov­ern­ment data showed Ja­panese fac­tory pro­duc­tion fell un­ex­pect- edly for a sec­ond month in Au­gust, while sep­a­rate fig­ures last week showed con­sumer prices fell for the first time in more than two years.

The pre­vi­ous Tankan re­port showed sen­ti­ment among ma­jor man­u­fac­tur­ers had im­proved to the high­est level since March 2014, just be­fore the gov­ern­ment raised Ja­pan’s sales tax.

That hike, the first in 17 years, slammed the brakes on con­sumer spend­ing, and sent Ja­pan’s econ­omy into a brief re­ces­sion.

An­a­lysts have warned over a re­turn to con­trac­tion in the Ju­lySeptem­ber quar­ter, af­ter a con­trac­tion in the three months to June, ow­ing to a slow­down in key trad­ing part­ner China, weak con­sumer spend­ing at home and soft ex­ports.

Scores of Ja­panese firms de­pend heav­ily on Asian mar­kets, par­tic­u­larly China, from au­tomaker Nissan to fac­tory ro­bot­ics maker Fanuc.

The Tankan was pub­lished a day af­ter the In­ter­na­tional Mon­e­tary Fund voiced con­cern about the global econ­omy, partly weak­ened by China’s slow­down.

An­a­lysts are in­creas­ingly bet­ting that the BOJ will be forced to turn on the eas­ing taps sooner rather than later.

The BOJ “will have to ac­knowl­edge that weaker ex­ter­nal de­mand has damp­ened the mood at home when mem­bers meet next week,” Thieliant said, re­fer­ring to the bank’s two-day pol­icy meet­ing from Tues­day.

Newspapers in English

Newspapers from Taiwan

© PressReader. All rights reserved.