TOKYO (AP) — Business confidence at big manufacturers deteriorated for a third straight quarter, a Bank of Japan survey showed Monday, as the world’s third-largest economy grapples with rising costs, a weaker currency and a slowdown in global demand. slow problem.
The Tankan index, which measures sentiment among large manufacturers, was positive 8, down from a positive 9 in the previous quarter.
Tankan measures corporate sentiment by subtracting the number of companies that indicate negative business conditions from those that respond positively.
Japan has struggled to fight deflation in recent years and has kept interest rates close to zero. Prices have been rising, but at a more modest pace than in other major economies, and the Bank of Japan has not followed suit in raising interest rates.
That means the yen has weakened against the surging dollar. This has made exports of cars and electronics more competitive in overseas markets and boosted the value of overseas earnings for major companies such as Toyota. But it also hit their bottom line at a steeply rising cost.
The war in Ukraine has added problems to the resource-poor country that imports nearly all of its oil, gas and coal.
The dollar bought about 145 yen on Monday, up from 130 a few months ago and about 110 a year ago.
The Tankan found that sentiment for large non-manufacturers such as service providers rose from 13 to 14. This reflects a recovery in the services sector as precautionary measures against the spread of COVID-19 are eased.
Japan has been battling a sluggish economy for decades, but the stagnation has been exacerbated in the past two years as the pandemic has cut travel and supply shortages.
After nearly closing its borders for most of the past two years, Japan plans to start allowing visa-free travel later this month to capitalize on demand from foreign tourists eager for greater purchasing power as the yen weakens.
In a speech to lawmakers on Monday, Prime Minister Fumio Kishida pledged to make the economy a top priority and push for measures “to maximize the benefits of a weaker yen” to collect about 5 trillion yen (34.5 billion yen) a year. USD) may be spent by foreign tourists in Japan.
Yuri Kageyama on Twitter https://twitter.com/yurikageyama