Japanese business confidence hits a two-year high
As the global economy rebounded from the coronavirus pandemic, sentiment among large Japanese manufacturers has risen to its highest level since the last quarter of 2018.
Bank of Japan Tankan Index Up from plus 5 It was +14 in the second quarter of this year, slightly lower than analysts’ expectations of +15, indicating a strong expansion in output.
But sentiment in the service industry was disappointing. The index rose from minus 1 to plus 1, because Japan experienced a wave of Covid-19 cases that triggered State of emergency In the big city.
Tom Learmouth, a Japanese economist at the consulting firm Capital Economics, said the Tankan report suggests that a weak start to the year will quickly give way to a strong recovery. He predicted that Japan’s production will return to the level before the virus outbreak by the end of the year.
John Vail, chief global strategist at Nikko Asset Management, said the index indicates a strong outlook. He said: “The tankan of large manufacturers shows that the current situation has soared well above its long-term average, not far from the ten-year high.”
Tankan is a business sentiment survey, similar to the Purchasing Managers Index, but with an unusually broad scope, covering nearly 10,000 companies, with a response rate of over 99%.
Among other questions, companies were asked whether business conditions were “favorable” or “unfavorable.” Subtracting the latter from the former results in an index ranging from minus 100 to plus 100. A reading above zero indicates that the business is in good condition.
The situation in industries that provide capital equipment to Chinese manufacturers is particularly strong. The production machinery index is +26, and the motor index is +28.
However, Japan’s mainstay automotive industry fell from positive 10 to positive 3. This may reflect The impact of semiconductor shortages On the output.
The service industry affected by the state of emergency is still sluggish, with a negative 74 for hotels and restaurants and a negative 10 for traffic. When the restrictions were lifted in mid-June, The restaurant was asked Alcoholic beverages are not served and the door closes at 8pm.
Companies predict that capital expenditures this year will increase by 9.6%, indicating that corporate investment will drive overall output growth, while companies report a slight increase in labor shortages.
Economists generally predict that with Japan’s Covid-19, economic growth will accelerate for the rest of 2021 Vaccination campaign accelerates the pace??The country vaccinates approximately 1% of the population every day, and 23% of the public has received at least one dose of the vaccine.