World News | Bank surveys show Japanese firms turning pessimistic

TOKYO, April 3 (AP) Business confidence among Japan’s top manufacturers deteriorated for the fifth straight quarter in the first quarter of this year, according to a central bank survey released Monday.

The headline indicator in the BOJ’s quarterly survey, called the Tankan, found the sentiment at plus 1, down from plus 7 in December. It was the worst quarterly result since December 2020.

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The main non-manufacturer sentiment index rose 1 point to plus 20, the fourth straight quarter of improvement.

Japan’s economy, which has stagnated in recent years and wage growth has been slow, has been hit by inflationary pressures of late, although some parts of the country’s economy continue to experience deflation, contrary to the continuing trend of falling prices.

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Uncertainty about global growth is affecting the export-dependent nation. The woes have been exacerbated by the recent turmoil in the U.S. banking sector, which has coincided with a surge in energy prices caused by Russia’s war in Ukraine. Almost all of Japan’s oil is imported.

A weaker yen has boosted the value of overseas earnings for exporters such as Toyota and Nintendo, but has proven challenging with rising energy costs.

For the Tankan sentiment forecast three months out, large manufacturers are expected to improve by 2 percentage points to 3.

The Bank of Japan’s possible interest rate measures are closely watched. For years, the Bank of Japan has kept interest rates at zero or negative levels to help the country out of an economic downturn.

The key rate is now at minus 0.1%. The BOJ’s goal is to stabilize prices by 2 percent.

New bank governor Kazuo Ueda, who was approved by parliament last month, will take office on April 9, succeeding Bank of Japan Governor Haruhiko Kuroda after a ten-year term.

Ueda has not indicated that he will be leaving his predecessor’s position. But he comes from an academic background and was the first such governor of postwar Japan. Most of the previous governors had served in the central bank or finance ministry.

Hopes are being pinned on Ueda to steer Japan steadily away from “Abenomics,” the ultra-loose monetary policy championed by the late Prime Minister Shinzo Abe.

Prime Minister Fumio Kishida has pledged to raise incomes and tackle the country’s falling birth rate. He has also sought to increase defense spending and restart nuclear power plants in response to the energy crunch.

Remnants of uncertainties such as the war in Ukraine and computer chip shortages, lockdowns and supply chain problems caused by the coronavirus pandemic have hurt Japan badly. The country also needs to foster new growth areas to keep pace with global competition. (Associated Press)

(This is an unedited and auto-generated story from a Syndicated News feed, the content body may not have been modified or edited by LatestLY staff)