TOKYO (Reuters) – Business confidence levels of Japanese manufacturers and companies in the service sector were little changed in June from the previous month, underscoring the fragile and uneven state of the country’s coronavirus recovery, showed a Reuters investigation.
While manufacturers’ mood has remained positive thanks to strong foreign demand, it is expected to be slightly lower than three months of this month, according to the Reuters Tankan poll, which tracks the Bank of Japan’s quarterly Tankan survey ( BOJ) closely monitored.
The Reuters Tankan Confidence Index for Manufacturers edged up to 22 from 21 in May, while the mood in the services sector was more austere. The service index was stable, down from 2 the previous month, according to the survey conducted from June 3 to 14. (For a detailed table of results, click)
Reuters Tankan Index readings are calculated by subtracting the percentage of respondents who say conditions are bad from those who say they are good. A positive reading means optimists outnumber pessimists.
Among manufacturers, favorable sentiment towards manufacturers of chemicals and metals offset less favorable conditions in sectors such as textiles and paper, according to the survey of 481 large and medium-sized enterprises, in which 238 companies reported. responded on condition of anonymity.
“We are seeing a positive impact from the growing demand abroad and in industries related to electronic materials,” said an official at a chemical manufacturer.
The poll comes a day before the BOJ ends a June 17-18 political meeting where it could expand its pandemic relief programs to support the country’s economic recovery, which would help bolster the country’s economic recovery. idea that it will lag behind other central banks in the crisis – fashion policies.
The BOJ’s next survey of corporate tankans is slated for July 1, weeks before Tokyo hosts the Olympics later in the month, when the event could fuel a spike in infections. COVID-19.
The Japanese economy is expected to narrowly avoid falling into recession this quarter, but it is unlikely to experience the strong growth rates of the United States, in large part due to the prolonged limitation of coronaviruses and the late deployment of vaccines in Tokyo.
The Reuters Tankan investigation also highlighted the blow businesses were feeling from the health crisis, with an official for a wholesaler describing the recovery from the coronavirus blow as still “slow.”
Another manager, of a real estate company, also remained negative. “Demand in aviation continues to decline due to the impact of the coronavirus,” the official wrote in the investigation.
According to the survey, manufacturers’ confidence in businesses fell a notch to 21 in September, while that of companies in the service sector is expected to reach 10.
Reporting by Daniel Leussink; Editing by Kim Coghill