Business sentiment in Japan has fallen for the first time in seven quarters as worries about a persistently strong yen and slowing exports hit corporate confidence.
The Bank of Japan’s quarterly tankan survey of business sentiment released yesterday showed that the main index for large manufacturers fell to five this month from eight three months ago.
The figure represents the percentage of companies saying business conditions are good minus those saying conditions are unfavorable, with 100 representing the best mood and minus 100 the worst.
The result from the latest tankan — a closely watched barometer of the country’s economic health that helps the central bank guide monetary policy — is slightly better than Kyodo news agency’s average market forecast for a reading of three.
The index had climbed for six straight quarters as Japan mounted a solid recovery from deep recession, but a strong yen and easing global demand are battering exporters, which have been the main drivers of Japan’s growth. Automakers like Toyota Motor Corp are also feeling the impact from the expiration of government subsidies for fuel efficient cars.
“The improvement that began in March 2009 ... came to an end, giving way to deterioration, albeit small,” Goldman Sachs economist Chiwoong Lee in a note to clients said.
Readings varied among sectors, he said. Metals and oil companies, which benefited from higher commodity prices, reported improving sentiment, but the mood at automakers tumbled.
The latest result suggests that companies are bracing for tougher times ahead. They predict confidence will keep deteriorating, with large manufacturers saying they expect the index to be in negative territory for the first time since March.
However, companies tend to be cautious when the economy is staging a recovery, said Masamichi Adachi, senior economist at -JPMorgan Securities Japan. He doesn’t think the tankan’s prediction for business confidence to become negative will happen.
The Bank of Japan surveyed a total of 11,183 companies between Nov. 11 and Tuesday. Almost 99 percent responded.
Its next policy board meeting is scheduled for Monday and Tuesday.
From the customer’s perspective, car rental is a straightforward business. The only uncertainty is whether the hire company will charge you for the scratch they discover when you hand back the vehicle. Hertz Global Holdings Inc’s bankruptcy protection filing on Friday last week was a reminder that today even the simplest business models are underpinned by a lot more financial complexity than meets the eye. The proximate cause of Hertz’s demise was of course the sudden collapse in bookings caused by COVID-19 travel restrictions. The company’s monthly revenue last month fell 73 percent year-on-year, a shortfall that even the most resilient
Uber Technologies Inc, Lyft Inc and Airbnb Inc have slashed thousands of jobs. Salesforce.com Inc and Visa Inc are letting employees work remotely for months; Twitter Inc and Square Inc are allowing them to do so for good. For the companies’ hometown of San Francisco, the moves are early signs of a dire blow. In a city with a long history of booms, busts and natural calamities, the COVID-19 pandemic has suddenly upended nearly a decade of prosperity. While municipalities across the US are grappling with economic fallout from the virus, San Francisco stands to take a deeper hit given its high
BULK PURCHASE: The French chain and Hong Kong-based Dairy Farm International reached a deal covering 224 stores, which is expected to be finalized by year’s end Carrefour SA yesterday announced it would acquire Wellcome Taiwan Co (惠康百貨) for 97 million euros (US$108.33 million), and bring all the Wellcome supermarkets (頂好超市) and Jasons Market Place stores nationwide under its banner within 12 months of the deal closing. The France-based hypermarket chain reached an agreement with Hong Kong-based Dairy Farm International Holdings (牛奶國際控股), the pan-Asian retailer that launched Wellcome Taiwan in 1987. The transaction involves 199 Wellcome supermarkets, which have average sales areas of 420m2 and 25 high-end Jasons Market Place stores, which have an average sales area of 820m2, as well as a warehouse in Taoyuan, Carrefour Taiwan (家樂福)
‘ONE-STOP SHOP’: A Miaoli official said that the factory in the Jhunan section of the Hsinchu Science Park would create more than 1,000 jobs and boost prosperity A new high-end IC packaging and testing plant planned by contract chipmaker Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) in Miaoli County is expected to start operations in the middle of next year, Miaoli County Commissioner Hsu Yao-chang (徐耀昌) said. Hsu wrote on Facebook that TSMC, the world’s largest pure wafer foundry operator, would invest NT$303.2 billion (US$10.1 billion) to build the plant, the largest-ever single investment in Taiwan. However, TSMC declined to disclose the financial terms of the deal, while a company board meeting on May 12 approved a spending plan worth NT$168.2 billion as part of its investment plans. Construction of the