August Japan business sentiment slips on China slowdown: Reuters poll by Reuters

By Kaori Kaneko

TOKYO (Reuters) – Japanese manufacturers became slightly less confident about business conditions in August and sentiment in the services sector eased, the monthly Reuters Tankan survey found on Wednesday, as weak demand from China weighed on corporate sentiment.

The survey comes after the Bank of Japan (BOJ) last month raised interest rates to levels not seen in 15 years and launched a detailed plan to slow its massive bond-buying.

The sentiment index for manufacturers fell to plus 10 in August, down one point from July, according to the Reuters Tankan poll, which closely tracks the BOJ’s quarterly business survey.

Manufacturers expect the index to fall further to plus five over the next three months, the survey showed.

“Car sales are slow, especially in China,” a manager at an automotive and transportation firm wrote in the survey.

Managers in a wide range of industries, such as chemicals, steel and electronics, said weak demand from China had hurt business sentiment.

Higher inflation and volatile markets were also among the issues of concern, the survey found.

“Uncertain factors such as the cost of raw materials and exchange rates are on the rise,” wrote a rubber company manager.

The Reuters poll was conducted from July 31 to August 9, when Japanese stocks tumbled in their biggest one-day loss since the Black Monday sell-off of 1987 after weak labor data in The US raised recession fears and the yen rose against the dollar as investors retreated. commercial transport.

The Reuters Tankan index of the services sector fell for a second month to plus 24 in August, from plus 26 in July. Non-manufacturers expect the index to return to plus 26 in November. Solid inbound demand supported sector confidence.

Reuters Tankan indices are calculated by subtracting the percentage of pessimistic responses from optimistic ones. A positive number indicates that optimists outnumber pessimists.

A total of 506 large non-financial firms were surveyed and 243 firms responded on condition of anonymity for the August survey.