But worries remain
The mood in the managerial floors of Japanese large-scale industry continues to brighten after the severe slump due to the corona pandemic. According to a quarterly survey (“Tankan”) published on Monday by the Japanese central bank of around 10,000 companies in the country, the sentiment index it determined for the large manufacturing companies rose from minus 27 to minus 10 in December.
A negative index, however, means that the pessimists in the industry are still in the majority. However, this has improved sentiment in the second quarter, and more so than many economists in Japan had expected.
In July, the mood in Japan's big industry fell to its lowest level since June 2019 due to the pandemic. In the meantime, the important export engine of the world's third largest economy, ahead of Germany, is slowly gaining momentum again, led by car exports to important markets such as China and the USA. And the non-manufacturing companies in the country are now a little less pessimistic. The corresponding sentiment index for these companies rose from minus 12 three months ago to minus 5. Overall, however, sentiment in Japan's economy is still depressed.
While major industry is anticipating a further slight improvement in the mood index to minus 8 over the next three months, the country's non-manufacturing companies are forecasting another deterioration. Accordingly, their mood index should fall to minus 6, as the survey shows.
