Navigation
Suscribe
Menu Search Facebook Twitter
Search Close
Menu ALL SECTIONS
  • Capital Coahuila
  • Capital Hidalgo
  • Capital Jalisco
  • Capital Morelos
  • Capital Oaxaca
  • Capital Puebla
  • Capital Quintana Roo
  • Capital Querétaro
  • Capital Veracruz
  • Capital México
  • Capital Michoacán
  • Capital Mujer
  • Reporte Índigo
  • Estadio Deportes
  • The News
  • Efekto
  • Diario DF
  • Capital Edo. de Méx.
  • Green TV
  • Revista Cambio
Radio Capital
Pirata FM
Capital Máxima
Capital FM
Digital
Prensa
Radio
TV
X
Newsletter
Facebook Twitter
X Welcome! Subscribe to our newsletter and receive news, data, statistical and exclusive promotions for subscribers
Business

Japan Business Mood Sours to 3-Year Low, Adds to Doubt Over 'Abenomics'

Shinzo Abe and the Bank of Japan face challenging times as economic recovery remains fragile

Japan's Prime Minister Abe's "Abenomics" have not yet had the desired impact, Photo: Reuters/Yuya Shino.
By Reuters Whatsapp Twitter Facebook Share
1 year ago

TOKYO – Japanese big manufacturers’ business sentiment deteriorated to the lowest in nearly three years and is expected to worsen in the coming quarter, a closely watched central bank survey showed, heightening pressure on both premier Shinzo Abe and the Bank of Japan to do more to shore up the ailing economy.

Big firms also cut their capital expenditure plans for the current fiscal year that began in April, underscoring the challenges the BOJ faces in nudging risk-shy companies into boosting spending through aggressive money printing.

The Bank of Japan must convince spenders to boost spending. Photo: Reuters/Yuya Shino.

The Bank of Japan must convince spenders to boost spending. Photo: Reuters/Yuya Shino.

The weak reading may also persuade Abe to delay yet again a sales tax hike scheduled for next year to keep the economy afloat.

It will also keep the BOJ under pressure to loosen monetary policy further when it reviews its quarterly forecasts later this month, some analysts say.

“The slowdown in emerging economies, particularly that of China, has affected business sentiment. The impact was big for big manufacturers with direct exposure to global economic conditions,” a BOJ official told reporters in a briefing.

The headline index gauging big manufacturers’ sentiment stood at plus 6 in March, half the level seen three months ago and worse than a median market forecast of plus 8, the central bank’s “tankan” quarterly survey showed on Friday.

It was the lowest reading since June 2013, when big manufacturers’ mood stood at plus 4.

The sentiment index for big non-manufacturers slid to plus 22 from plus 25 three months ago, deteriorating for the first time in six quarters, as a spending spree by overseas visitors moderated.

Both big manufacturers and non-manufacturers expect sentiment to worsen in the coming three months, underscoring companies’ concern over the murky global economic outlook.

Big firms slashed their capital spending by 0.9 percent for the current fiscal year, compared with a median market forecast for a 0.7 percent decline, the survey showed.

Japan’s economy shrank in October-December due to weak exports and consumption. Many analysts now expect it to have contracted again in January-March, which would put the country back into recession, commonly defined as two straight quarters of negative growth.

The BOJ’s controversial decision in January to adopt negative interest rates has so far failed to boost stock prices or brighten corporate sentiment.

The government, for its part, is already considering compiling a fresh fiscal stimulus package and delaying next year’s sales tax hike to prevent external headwinds from derailing a fragile economic recovery.

The slowdown in emerging economies, particularly that of China, has affected business sentiment. The impact was big for big manufacturers with direct exposure to global economic conditions.”
-Bank of Japan.

LEIKA KIHARA AND TETSUSHI KAJIMOTOTO

Comments Whatsapp Twitter Facebook Share
More From The News
World

Aid Begins to Flow to Hurricane-Hit Puer ...

36 mins ago
World

Merkel Seen Winning 4th term, Nationalis ...

2 hours ago
Mexico

Earthquake Death Toll Rises

15 hours ago
Mexico

After Quakes, Mexico Volcano Spews Vapor ...

15 hours ago
Most Popular

7.1 Magnitude Quake Kills 139 as Buildui ...

By The Associated Press
Mexico

New Earthquake, Magnitude 6.1, Shakes Ji ...

By The Associated Press
Mexico

INAH: Report Damaged Museums, Cultural H ...

By The News
Mexico

After Quakes, Mexico Volcano Spews Vapor ...

By The Associated Press
Mexico

Hurricane Max Forecast to Hit Southern M ...

By The Associated Press
Mexico