Confidence among Japan’s biggest manufacturers has slipped for the fourth straight quarter, a key survey showed Friday, reflecting lingering worries over the US-China trade war.
The Bank of Japan’s December Tankan business survey – a quarterly poll of about 10,000 companies – showed a reading of 0 among major manufacturers, a worse-than-expected fall from +5 in the previous quarter. The market consensus was for a +3 reading.
The Tankan survey reports the difference between the percentage of firms that are upbeat and those that see conditions as unfavorable. It is considered to be the broadest indicator of how Japan Inc is faring.
Economists have warned that worries over US-China trade frictions are forcing manufacturers to refrain from active investment.
The latest reports, however, suggested the United States and China had struck a bargain on trade, which would cancel a fresh round of tariffs on $160 billion in Chinese imports due to kick in on Sunday.
A long-planned sales tax hike in Japan to 10%, from 8%, could also have weighed on growth, they said.
A temporary halt in factory operations due to deadly Typhoon Hagibis in October could also be a reason for a dip in confidence, said Hiroshi Miyazaki, senior economist at Mitsubishi UFJ Morgan Stanley Securities, ahead of the survey.
The index for non-manufacturers fell to 20 from 21 in the previous quarter.
Japan’s economy, the world’s third-biggest, grew 0.4% in the third quarter, the third straight period of expansion.