Business Sentiment Among Japanese Manufacturers Worsens to Six-Year Lows

The most recent Reuters Tankan survey reveals a worsening outlook among manufacturers in Japan following the ongoing trade tensions, slowdown in global economic growth, natural disasters and the recent sales tax hike in the nation. According to the poll, the sentiment among manufacturers has declined to an over six year low while the services sector’s sentiment languishes around three year lows.

The business sentiment index among Japanese manufacturers declined to -9 in November from -5 in October – the lowest levels seen since March 2013. Meanwhile, the services sector sentiment index experienced a steep decline to +12 in November from +25 in November as a result of the sales tax hike weighing heavily on retailers.

The Tankan quarterly survey is closely observed by the Bank of Japan (BOJ) and influences its outlook for the economy. On a positive note, however, the survey anticipates the mood among manufacturers to see an improvement over the coming quarter. Although, the services sector’s sentiment is expected to deteriorate further.

Japan’s manufacturing sector has been reeling under the spillover effect from the US-China trade war that has raged on for over a year. China is one of Japan’s leading trade partners and any slowdown in China’s economy has a corresponding impact on Japan’s economic growth as well.

 

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Arslan Butt
Index & Commodity Analyst
Arslan Butt serves as the Lead Commodities and Indices Analyst, bringing a wealth of expertise to the field. With an MBA in Behavioral Finance and active progress towards a Ph.D., Arslan possesses a deep understanding of market dynamics.His professional journey includes a significant role as a senior analyst at a leading brokerage firm, complementing his extensive experience as a market analyst and day trader. Adept in educating others, Arslan has a commendable track record as an instructor and public speaker.His incisive analyses, particularly within the realms of cryptocurrency and forex markets, are showcased across esteemed financial publications such as ForexCrunch, InsideBitcoins, and EconomyWatch, solidifying his reputation in the financial community.
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