Japanese manufacturers’ confidence is weakening


Confidence among Japan’s major manufacturers weakened for the first time in almost two years, a key business survey showed on April 1, as concerns mounted over the impact of the Ukraine crisis.


The Bank of Japan’s Tankan Business Survey returned large manufacturers a plus 14, down from the previous plus 17.

A positive number means that more manufacturers view business conditions as favorable than those who view them as unfavorable, and the survey is considered the most comprehensive indicator of how Japan Inc. is faring.

The latest read — the first drop in seven quarters — comes more than a month after Russia invaded Ukraine and started a war that has pushed up commodity prices and sparked parts

“While (up 14) is still not particularly weak by previous measures, it suggests that supply constraints are still holding back some manufacturers,” said Tom Learmouth, Japan economist at Capital Economics.
“Sentiment outside of manufacturing held up better than expected during the Omicron wave and the labor market continued to tighten,” he added.

“In fact, we believe production will rebound strongly in the second quarter.”

Japan’s top government spokesman said on April 1 that despite the decline, business confidence among major manufacturers is still at high levels.


“The situation reflects weakness in some areas as the difficult situation caused by the pandemic continues,” Hirokazu Matsuno said at a regular news conference.

The government is planning measures to cushion the impact of commodity inflation, he added.


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