• Kyodo


Business confidence among large companies deteriorated in the quarter ended in December as manufacturing and exports stayed weak, with carmakers decelerating in part due the ongoing Senkakus dispute with China, a government survey said Monday.

The sentiment index stood at minus 5.5, down from 2.2 for the July-September quarter and the first negative figure in two quarters, the Finance Ministry and the Cabinet Office said. The reading covered companies capitalized at ¥1 billion or more.

The result was much weaker than the government’s forecast in the previous survey in August when it said the index would rise to 5.4. Looking ahead, it is expected to improve to 1.7 in the January-March quarter before dropping to 0.4 in the next.

The index is calculated by subtracting the percentage of companies reporting deteriorating business conditions from those observing improvements.

The reading for manufacturers worsened to minus 10.3 from 2.5, with automakers and car parts makers as well as telecommunication equipment manufacturers notably pessimistic.

The auto sector has suffered falls in exports amid the global economic downturn in the wake of the eurozone sovereign debt crisis and slower growth in China and other emerging economies. The industry is also under pressure from waning domestic demand following the end in September of the government’s subsidy program for purchases of environmentally friendly vehicles.

The strained relations between Japan and China have cast a shadow over manufacturing sentiment.

In a time of both misinformation and too much information, quality journalism is more crucial than ever.
By subscribing, you can help us get the story right.