Japanese Manufacturers' Business Sentiment Improves, But Still Pessimistic

Japanese Manufacturers’ Business Sentiment Improves, But Still Pessimistic

Posted Tuesday, August 18, 2020 by
Arslan Butt • 1 min read

Business sentiment among Japanese manufacturers rose to the highest level since four months but remained pessimistic amid the ongoing coronavirus crisis. According to the latest edition of the Reuters Tankan survey, manufacturers’ business sentiment improved from -44 in July to -33 in August, the highest level since February.

However, the negative figure continues to indicate a sense of pessimism among respondents. Companies indicated that they were seeing a pick-up in demand but the extent of rebound in activity remains far lower than previously anticipated.

The business sentiment among manufacturers is expected to improve to -22 by November. However, the sentiment among services sector companies in Japan is expected to dip from -23 in August to -26.

Domestic demand is expected to remain under pressure in the coming months due to a cautious mood among consumers. In addition to the impact of the coronavirus pandemic weighing on businesses, there are also simmering concerns surrounding US-China tensions are keeping companies on edge.

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