Band Daniel Leussink
TOKYO, June 15 (Reuters) – Japanese manufacturing confidence rose in June and remained stable in the services sector as resilient demand helped companies weather pressure from high commodity prices, a Reuters poll found, a sign of an economic recovery progressive.
The Reuters Tankan, which is highly correlated with the Bank of Japan’s quarterly tankan survey, found that sentiment in manufacturing and service sectors is expected to improve over the next three months, although companies have reports pressure from rising costs compounded by a weaker yen.
The monthly survey of 499 large and medium-sized companies, of which 238 responded between June 1 and June 10, comes amid uncertainty over the economic outlook in Asia due to China’s heavy-handed approach to eradicating epidemics. of COVID-19.
“Conditions remained as strong as they were in the first three months of the year, even with rate hikes in the United States and lockdowns in China,” said an official from a manufacturer. chemical products.
Reuters Tankan confidence index for manufacturers rose to 9 in June from 5 in the previous month, driven by chemical companies as well as manufacturers of metal products and machinery. It was expected to increase further to 12 in September.
(For a detailed table of results, click on )
“We are facing higher costs due to higher raw material prices resulting from a weaker yen,” said an official at a textile/paper maker.
The services sector index was flat from the previous month at 13 in June, although companies in the sector also said they were being weighed down by rising input costs, compounded by a weaker yen.
The services sector index reached 15 in September, mainly reflecting a pick-up in sentiment in the transportation/utilities sub-sector on hopes that China will ease restrictions aimed at containing the spread of the virus.
Sentiment indices subtract the percentage of companies saying conditions are bad from those saying conditions are good. A positive number means that optimists outnumber pessimists.
The BOJ is likely to keep interest rates ultra-low on Friday, unfazed by a relentless fall in the yen that has pushed up import costs.
The central bank’s latest tankan in April showed business confidence among major Japanese manufacturers deteriorated for the first time in nearly two years in the first quarter as companies were hit by supply disruptions and the skyrocketing cost of raw materials caused by the war in Ukraine.
(Reporting by Daniel Leussink; Editing by Simon Cameron-Moore)
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