Tokyo, 13 December, /AJMEDIA/
Business confidence among major Japanese nonmanufacturers improved to pre-pandemic levels in December, enhanced by the lifting of a COVID-19 state of emergency, but the improvement in manufacturers paused with parts shortages causing pain for automakers, the Bank of Japan said Monday.
In the quarterly “Tankan” survey, the key confidence index for nonmanufacturers, including the services sector, rose to 9 from 2 in the previous survey, marking the sixth straight quarter of improvement, the highest since December 2019.
The recovery in the services sector still lags behind big manufacturers, whose confidence was flat at 18 after five quarters of gain, the survey showed.
The average market forecasts were 7 for the nonmanufacturing sector and 18 for manufacturers in a Kyodo News survey.
The Tankan index represents the percentage of companies reporting favorable conditions minus the percentage reporting unfavorable ones.
With the virus emergency lifted Japan-wide since Oct. 1, economic activity has been picking up, giving some relief to service providers such as dining establishments, bars and hotels which had seen a sharp drop in customers and sales.
Sentiment among hotel and restaurant operators jumped 24 points from September to minus 50 while that among providers of face-to-face services improved 36 points to minus 9.
For manufacturers, parts shortages stemming from factory shutdowns in some Southeast Asian nations with surging COVID-19 cases and soaring raw materials costs have become a drag after they recovered faster than service providers from the pandemic fallout.
Automakers were more pessimistic than three months ago as sentiment was down 1 point to minus 8.
Japan has seen a clear downturn in newly confirmed coronavirus cases in recent weeks, though concern remains over the Omicron variant of the virus that could put a dampener on the economy.
The impact of the new variant was not reflected fully in the latest data, a BOJ official said.
