Tokyo, 1 July, /AJMEDIA/
Business confidence among major Japanese manufacturers worsened for the second straight quarter in June, affected by rising energy and raw material costs amid Russia’s invasion of Ukraine, the Bank of Japan’s Tankan survey showed Friday.
The key index measuring sentiment among companies such as automakers and electronics makers dropped to 9 from 14 marked three months earlier. It was below the average market forecast of 13 in a Kyodo News survey.
The index for large nonmanufacturers, including the service sector, improved to 13 from 9 in the previous survey, reflecting a recovery from the impacts of the coronavirus pandemic.
The Tankan index represents the percentage of companies reporting favorable conditions minus the percentage reporting unfavorable ones.
The worsening sentiment among major manufacturers is also attributable to parts shortages stemming from lockdowns in China due to the COVID-19 pandemic, a BOJ official said, with confidence in the auto sector falling further to minus 19 from minus 15 in March.
Russia’s war in Ukraine has sent crude oil and commodity prices sharply higher amid a spike in geopolitical risk and supply concerns. Russia is a major exporter of crude oil and natural gas.
The yen has been falling sharply against major currencies such as the U.S. dollar and the euro, inflating the cost of imported raw materials.
