The confidence of Japanese manufacturers has stabilized and pessimism dominates services


The Reuters Tankan survey showed that the confidence of Japanese manufacturers had stabilized in January, to become less pessimistic in more than a year about the repercussions of Covid-19, but service companies increased pessimism in conjunction with the start of new closures involving the majority of the country’s population.
The degree of pessimism among manufacturers in the third largest economy in the world reached its lowest level since July 2019, but expectations, especially for the services sector, are shaded under the shadow of a pandemic emergency that includes Tokyo and a number of other cities until February 7.
The improvement in manufacturers’ confidence came on the back of optimistic insights in the chemical, metal products and electrical machinery sectors, according to a monthly poll conducted by Reuters, which tracks the quarterly Tankan survey by the Bank of Japan.
“The auto market is recovering quickly, especially in China, and the demand for electrical components is growing,” wrote a manager at an electrical machinery company who participated in the survey, which includes 482 non-financial companies, ranging from large to medium. 253 respondents answered the survey questions anonymously.
The Reuters Tankan index of manufacturer confidence rose to negative 1 from negative 9 in the previous month, while the services sector index fell to negative 11 from negative 4 in December, according to the results of the survey conducted between December 24 and January 13.
A negative reading means that the pessimists outnumber the optimists.
Japan’s economy grew 22.9 percent year-on-year in the third quarter, recovering from a contraction between July and September that was the worst of the post-World War II era as the pandemic ravaged economic activity.
The government pledged to spend $ 3 trillion to boost the economy. And this month, Prime Minister Yoshihide Suga declared a second state of emergency, which now includes Tokyo, Osaka, Kyoto and other areas inhabited by 55 percent of Japan’s population.


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