TOKYO, Japan (AFP) — Confidence among Japan’s biggest manufacturers has slipped for the third straight quarter, a key central bank survey showed on Monday, reflecting concern about trade wars and a string of natural disasters.
The Bank of Japan’s Tankan report — a quarterly survey of about 10,000 companies — showed a reading of 19 among major manufacturers in its September survey, against 21 in the June report.
It is the first time the reading has fallen for three straight quarters since 2008, at the height of the economic crisis.
Economists say the decline was partially due to worries over US-led trade disputes, with companies also rattled by major quakes and typhoons that have affected Japan’s regional economies this year.
The index for non-manufacturers also declined for the quarter, slipping to 22 from 24 in the previous quarter.
But economists said the readings were not seen as cause for concern about the world’s third largest economy, with the headline index still close to its highest level in over a decade.
The Tankan report, the broadest indicator of how Japan Inc is faring, marks the difference between the percentage of firms that are upbeat and those that see conditions as unfavorable.
Looking ahead, “big companies appear to have stronger confidence than expected, partially due to a weak yen,” Hideo Kumano, chief economist at Dai-ichi Life Research Institute, told AFP.
The survey came after solid job market-linked data released last week, including a further fall in the nation’s jobless rate, while Japanese shares are hovering around a 27-year high.
Economists argue Japan is on a solid recovery path on the back of a global economic recovery, with investments linked to the Tokyo 2020 Olympics also giving the economy a shot in the arm.
However, they warn that the impact of US-led trade disputes with its partners, especially China, could overshadow progress made by Japan, which relies heavily on global trade.
“The fight between the number one and the number two economies can’t be ignored,” Kumano said. “The impact will be visible soon.”
US President Donald Trump last week imposed a further $200 billion in tariffs on Chinese goods and vowed to press ahead until Beijing buckles.
His latest volley against China, which retaliated with more levies of its own, brings the amount of goods hit by duties to more than $250 billion, roughly half of China’s US exports.
© Agence France-Presse