TOKYO, Oct 3 (Reuters) – Japanese manufacturers’ business sentiment worsened in the three months to September, a central bank survey showed on Monday, fueling views that a weaker yen and inflationary pressures on business spending are undermining a weak economic recovery.
Adding to the gloom, fears of a global economic slowdown cloud the outlook for the export-dependent economy, which is still recovering from the coronavirus pandemic.
Sentiment in the service sector was brighter than three months ago, according to Bank of Japan’s “Tankan” survey, although retailers were less optimistic as higher commodity prices and a weaker yen pushed imports into the country.
The headline index of major manufacturers rose 8 in September and 9 in June, the quarterly survey showed, and 11 in the mid-market forecast.
The major non-producer index stood at 14 on September, with a 13 increase. This compares to an average market forecast of plus 13.
The country’s major manufacturers expect business conditions to improve three months ahead, while the sentiment of non-major manufacturers is worsening, the survey indicated.
Japan’s economy grew 3.5% in the second quarter as the lifting of COVID-19 restrictions boosted consumption. But many analysts expect growth to slow in the third quarter, as slowing global demand and rising commodity prices weigh on exports and consumption.
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Reporting by Leika Kihara and Tetsushi Kajimoto; Editing by Sam Holmes
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