Pandemic to sink Japan business mood to lowest since 2009 global financial crisis: Reuters poll By Reuters



© Reuters. The outbreak of the coronavirus disease (COVID-19) in Tokyo

By Leika Kihara

TOKYO (Reuters) – Business sentiment among Japan’s big manufacturers in the second quarter likely tanked to levels last seen during the 2009 global financial crisis as the coronavirus pandemic crushed global demand and paralysed factory output, a Reuters poll showed.

The Bank of Japan’s closely watched “tankan” survey is also likely to show big non-manufacturers’ mood sinking to more than a decade-low, underscoring the sweeping economic impact of the global health crisis.

Analysts polled by Reuters expect the BOJ tankan’s diffusion index for big manufacturers to have hit -31 in the three months to June, down sharply from -8 in the first quarter survey. That would be the worst level since September 2009, when the collapse of Lehman Brothers a year earlier triggered a deep global economic downturn.

Big non-manufacturers’ index likely worsened to -18 in the June quarter from +8 three months ago, the poll showed, as lockdown measures to contain the virus forced citizens to stay home and retailers to close. That would mark the weakest level since December 2009.

“Manufacturers were hit hard by slumping overseas demand and exports,” said Hideo Kumano, chief economist at Dai-ichi Life Research Institute.

“Even harder hit were non-manufacturers. Sectors that were forced to close business due to state of emergency measures in April and May likely suffered devastating damage,” he said.

Both big manufacturers and non-manufacturers expect only modest improvements in business conditions three months ahead, the poll showed.

Big firms are likely to project a 2.1% increase in capital expenditure for the current fiscal year beginning in April, roughly unchanged from a 1.8% increase forecast in the March tankan, according to the Reuters poll.

Analysts are also closely watching how companies view job market conditions, as any evidence of excess labour capacity could signal rising job losses ahead.

The BOJ will release the tankan survey at 8:50 a.m. on July 1. (2350 GMT July 30).

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.





Source link

Leave a Reply

Your email address will not be published. Required fields are marked *