TOKYO (AP) — A closely watched economic survey by the Bank of Japan showed sentiment among major manufacturers soured for the fourth straight quarter, sapped by trade tensions and damage from a typhoon.
The trade war between the United States (US) and China crimped trade and growth for the world’s third largest economy, which is heavily dependent on exports. Any slowdown in pan-Pacific trade hurts corporate sentiment. An October 1 increase in the sales tax and damage from a typhoon also sapped demand, according to the “tankan” survey released yesterday.
It showed the headline index for big manufacturers’ sentiment was zero in December, down from plus 5 in September.
The index measures sentiment by subtracting the number of companies saying business conditions are negative from the number of respondents who say conditions are positive.
Recent economic data have been mixed, with machine orders for November coming in better than expected.
But car exports and domestic car sales weakened, Stefan Angrick of Oxford Economics said in a commentary.
But he noted that manufacturers and retailers expect conditions to improve somewhat in coming months. “Although external demand will likely remain sluggish, investment plans remain just above historical averages, albeit below 2017-2018 levels,” Angrick said. The government is preparing a JPY26 trillion (USD230 billion) stimulus package that will likely help offset some of the pressures slowing growth.