Sentiment among Japanese companies worsened to a record low during the January to March period as high materials prices and a strong yen ate into their profits, a government survey showed yesterday.
The dismal results add to the storm clouds surrounding the world's second-largest economy, with some analysts saying the Bank of Japan might be forced to ease monetary policy as soon as the first half of this year.
The large company business sentiment index -- which measures the percentage of companies saying that the economy will improve minus those saying it will get worse -- was at minus 9.3 in the first quarter. It was at plus 0.5 in the October to December period last year, the survey released by the Ministry of Finance and the Cabinet Office showed.
The sentiment index for mid-sized firms stood at minus 14.1; the same figure for small firms was minus 30.4.
The figures were the lowest since the ministry began using its current survey methods in the April to June quarter of 2004, reflecting concern about the impact of the US subprime problems on the Japanese economy.
Yet "actual business sentiment now may be worse than this survey since it was taken before the yen rose to very high levels," said Hideo Kumano, chief economist at Dai-ichi Life Research Institute.
The survey said that companies expected capital expenditure to drop by 9.4 percent in this fiscal year starting next month as profits fell by 2.9 percent last year.
Companies may also halt aggressive recruitment campaigns and cut wages gradually, sending already weak domestic demand into a tailspin.
UNPRECEDENTED PACE: Micron Technology has announced plans to expand manufacturing capabilities with the acquisition of a new chip plant in Miaoli Micron Technology Inc unveiled a newly acquired chip plant in Miaoli County yesterday, as the company expands capacity to meet growing demand for advanced DRAM chips, including high-bandwidth memory chips amid the artificial intelligence boom. The plant in Miaoli County’s Tongluo Township (銅鑼), which Micron acquired from Powerchip Semiconductor Manufacturing Corp (力積電) for US$1.8 billion, is expected to make a sizeable capacity contribution to the company from fiscal 2028, the company said in a statement. It would be an extended production site of Micron’s large-scale manufacturing hub in Taichung, the company said. As the global semiconductor industry is racing to reach US$1 trillion
ABOVE LEGAL REQUIREMENT: The Ministry of Economic Affairs is prepared if LNG supply is disrupted, with more than the legal requirement of 11 days of inventory Taiwan has largely secured liquefied natural gas (LNG) supplies through May and arranged about half of June’s supply, Minister of Economic Affairs Kung Ming-hsin (龔明鑫) said yesterday. Since the Middle East conflict began on Feb. 28, Taiwan’s LNG inventories have remained more than 12 days, exceeding the legal requirement of 11 days, indicating no major supply concerns for domestic gas and electricity, Kung said at a meeting of the legislature’s Economics Committee in Taipei. The ministry aims to increase the figure to 14 days by the end of next year, he said. While one or two LNG or crude oil shipments for May
Singapore-based ride-hailing and delivery giant Grab Holdings Ltd has applied for regulatory approval to acquire the Taiwan operations of Germany-based Delivery Hero SE's Foodpanda in a deal valued at about US$600 million. Grab submitted the filing to the Fair Trade Commission on Friday last week, with the transaction subject to regulatory review and approval, the company said in a statement yesterday. Its independent governance structure would help foster a healthy and competitive market in Taiwan if the deal is approved, Grab said. Grab, which is listed on the NASDAQ, said in the filing that US-based Uber Technologies Inc holds about 13 percent of
Taiwan’s food delivery market could undergo a major shift if Singapore-based Grab Holdings Ltd completes its planned acquisition of Delivery Hero SE’s Foodpanda business in Taiwan, industry experts said. Grab on Monday last week announced it would acquire Foodpanda’s Taiwan operations for US$600 million. The deal is expected to be finalized in the second half of this year, with Grab aiming to complete user migration to its platform by the first half of next year. A duopoly between Uber Eats and Foodpanda dominates Taiwan’s delivery market, a structure that has remained intact since the Fair Trade Commission (FTC) blocked Uber Technologies Inc’s
RSS