Japan business sentiment flat as trade tensions weigh

Top Stories

Japan business sentiment flat as trade tensions weigh
Japan's tankan survey showed sentiment remained flat at 19 for a second time after three quarters of decline.

Tokyo - Analysts say result still heartening after economy contracted at a 2.5% annual rate in July-September

By AP

  • Follow us on
  • google-news
  • whatsapp
  • telegram

Published: Fri 14 Dec 2018, 4:09 PM

Last updated: Fri 14 Dec 2018, 6:12 PM

A key quarterly economic survey released on Friday by the Bank of Japan showed that sentiment among large manufacturers remained unchanged, as worries about global trade tensions persisted.
The tankan survey showed sentiment remained flat at 19 for a second time after three quarters of decline. The survey has long been seen as an important indicator of the state of the world's third largest economy. It measures the difference between companies surveyed that have a "favourable" outlook and those with an "unfavourable" outlook.
The manufacturers surveyed include automakers and electronics companies that are mainstays of Japan's economy.
Some analysts had expected a downturn in sentiment. The survey did project that sentiment will drop by four points to 15 over the next three months.
Still, analysts said the news was heartening after the economy contracted at a 2.5 per cent annual rate in July-September.
"The Q4 tankan survey was better than most had anticipated and adds to the evidence that the economy has turned the corner," Marcel Thieliant, senior Japan, Australia and New Zealand economist at Capital Economics, said in a commentary.
He pointed to upbeat corporate capital spending plans. Overall, companies plan to increase investment by 10.4 per cent in the fiscal year that ends in March. That's up from a projection of 8.5 per cent in the previous quarter. The latest estimates are the strongest since 1990, he said, and suggest strong non-residential investment to come.
Still, Japan's growth is dependent on exports and any slowdown in pan-Pacific trade would hurt sentiment. Uncertainty over trade friction with the US also would discourage investment as manufacturers take a wait-and-see approach if their sales or profits might be affected by President Donald Trump's trade policies.
Japan has agreed to hold trade talks with the US to help soothe friction, especially over auto trade.


More news from