Japan’s Manufacturers Turn More Optimistic About Business Conditions - Forex News by FX Leaders
Japan's Manufacturers Turn More Optimistic About Business Conditions

Japan’s Manufacturers Turn More Optimistic About Business Conditions

Posted Friday, April 16, 2021 by
Arslan Butt • 1 min read

Japan’s manufacturing companies are turning more optimistic about economic conditions improving in the coming year, with business confidence surging to the highest levels seen in over two years during April. The Japanese manufacturers’ Reuters Tankan sentiment index surged from 6 in March to 13 in April, the highest reading seen since February 2019.

Business confidence among services sector firms in the world’s third largest economy has also improved, although it still stays in the negative territory indicating pessimism. The services sector index rose from -5 in March to -3 in April, remaining in contraction for the 14th straight month.

Business confidence among manufacturers posted a sharp increase over a pick-up in demand for electronics goods driving a global shortage for chips even as the exchange rate encouraged hopes for rising external demand. Meanwhile, the services sector outlook remains pessimistic due to restrictions in place keeping consumers away.

Manufacturing companies’ sentiment has picked up even as the BOJ eased its control on long-term interest rates in March and hinted at starting to taper off its massive asset purchase program over encouraging signs of economic recovery. However, businesses surveyed highlighted some challenges in procuring key raw materials and intermediate goods essential for production.

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About the author

Arslan Butt // Index & Commodity Analyst
Arslan Butt is our Lead Commodities and Indices Analyst. Arslan is a professional market analyst and day trader. He holds an MBA in Behavioral Finance and is working towards his Ph.D. Before joining FX Leaders Arslan served as a senior analyst in a major brokerage firm. Arslan is also an experienced instructor and public speaker.
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