TOKYO: Business confidence among big Japanese manufacturers fell for a second straight month to hit its lowest in five months, a Reuters monthly poll showed on Wednesday (Oct 12), in another sign global inflation and a weak yen were taking a toll on the trade-reliant economy.
The monthly poll, which tracks the Bank of Japan’s (BOJ) closely-watched tankan quarterly survey, found manufacturers’ mood expected to deteriorate again over the coming three months while service-sector mood was seen rebounding further.
In the Reuters Sep 28-Oct 7 poll of 495 big companies, out of which 254 replied, many firms, which responded on condition of anonymity, complained about higher costs of doing business due to cost-push inflation.
“The prices of products are not keeping in pace with surging raw materials costs” as many subcontractors in the supply chain could not pass on input costs to their clients, one manager at a chemicals maker said.
“There are concerns about worsening profits due to import costs boosted by a weak yen on top of rising raw materials and energy costs,” said a manager of a food-processing firm.
Some complained about the impact of geopolitical events on their business.
“Our clients are cautious about raising capital investment due to US-China frictions and the Ukraine crisis,” wrote a machinery maker manager.
The BOJ’s last survey showed on Oct 3 big manufacturers’ mood worsened in July-September for a third straight quarter as high material costs dim recovery prospects for the fragile economy.
The Reuters Tankan index readings are derived by subtracting the percentage of respondents who say conditions are poor from those who say they are good. A positive reading means optimists outnumber pessimists.
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