–
The Nikkei index on the Tokyo Stock Exchange fell 1.5 percent when trading began Friday morning. Investors are nervous, despite the fact that industrial companies are producing what they can and that the global supply crisis is expected to continue through the coming quarters.
Takes the pulse of the economy
Four times a year, the Bank of Japan takes the pulse of business with the Tankan report. Nearly 10,000 business leaders fill out detailed questionnaires towards the end of the quarter. On Friday morning, the report was read by decision-makers and investors.
The sentiment report is one of the earliest most important indicators of what can be expected in the coming months in the world’s third largest economy, but also the demand from other countries that make up the world economy.
For the first time in seven quarters, sentiment fell among the participants, who represent a broad layer of Japanese business from both industry and the service sector. The main reasons are stated to be the Ukraine war, the pandemic and high commodity prices.
–
– The Tankan survey for the first quarter indicates that value creation almost certainly fell in the last quarter, says macroeconomist with responsibility for Japan at Capital Economics, Tom Learmouth, in a note.
The Tankan report shows that large companies are still struggling with problems in the supply chains. The stocks of the largest companies included are the lowest ever recorded.
At the same time, there is optimism to be found in the service sector. The reason is that Japan has gained control of the corona pandemic and is in the process of reopening the borders. This means that Japan will probably avoid ending up in a two-quarter technical recession with an economic downturn.
41 percent of the population has received three vaccine doses. We expect the service sector to return sharply in the current quarter, although the increase in new cases in recent days continues, Learmouth wrote in the note on Friday morning.
Different country
International investors fled the Tokyo Stock Exchange from the New Year. Over the course of two months, the Nikkei index fell by more than 15 percent. In recent weeks, a certain sobriety has set in and investors have been reminded that large Japanese companies are delivering very solid results and growth.
Blackrock, the world’s largest fund management group with more than $ 10,000 billion in management, upgraded its outlook for Japanese equities this week. The reason is that Japanese companies are more sheltered than European competitors from the Ukraine war.
The Japanese economy is in a special position compared to other industrialized countries in Europe and North America. There are no signals from the central bank to raise interest rates immediately. It has been a goal for over 15 years to get a price increase of two percent. This can happen in April.
– In most industrialized countries, monetary policy is about to normalize and it is no longer an expansive fiscal policy. In Japan, there may be a package of measures worth 5,000 billion yen now that the economy is about to reopen. Monetary policy remains accommodating, says Investment Director Tad Fukushima to Bloomberg.(Terms)Copyright Dagens Næringsliv AS and / or our suppliers. We would like you to share our cases using a link, which leads directly to our pages. Copying or other use of all or part of the content may only take place with written permission or as permitted by law. For additional terms look here.
–
