Business Sentiment Among Japanese Companies Still Pessimistic

The business sentiment among Japanese manufacturers remains gloomy for the 14th consecutive month during September; however, there are encouraging signs that they are looking forward to a slow recovery. In the letter edition of the Reuters Tankan survey, the business sentiment index for companies in the manufacturing sector rose to -29 during September from -33 in the previous month.

While the figure continues to remain in negative territory indicating pessimism, this is the highest reading seen since six months. Companies manufacturing steel, non-ferrous metals, paper and textiles were the most pessimistic in the survey, driving down the overall industry’s sentiment.

Meanwhile, the business sentiment among services sector companies also saw an improvement, with the index rising from -23 in August to -18 for the month of September. Within this sector, wholesale businesses, transport and utilities companies expressed the highest levels of pessimism.

Business sentiment continues to be affected by the ongoing coronavirus pandemic which has driven a weakness in demand. With lockdown restrictions being eased, companies remain hopeful that the demand has bottomed out and will begin recovering in the coming months.

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