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Confidence among major Japanese manufacturers has cooled for a second quarter after hitting a 13-year high at the end of last year. While trade tensions cast a shadow over companies globally, Japan's top producers cite lack of workers and rising cost of materials as key concerns
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Key Takeaways
The Japanese labor market remains very worrying business more than the risk of a global trade war. It is more difficult to hire workers and to push for wage increases, but companies remain optimistic and plan to increase their investment. "Ironically, the prospect of wage increases that are worrying companies is exactly what the government and the central bank want, to support household spending and boost inflation.While workers' compensation increases significantly, the policy my Japan will remain very accommodating.
Economist Views
- "The BOJ will continue to say that price dynamics are maintained because the business climate is not deteriorating, and its policy is working, with many companies saying that financing conditions are easy." said Junko Nishioka, chief economist at Sumitomo Mitsui Banking Corp. "What we have learned from Tankan is that domestic supply constraints are weighing on business sentiment."
- "There is no There is no blatant weakness here, we still see everything that is above 20. It's very positive, "said Ed Rogers, CEO of Rogers Investors Advisors, on Bloomberg TV. "No matter the trade wars, the numbers on the ground are not so bad."
- "What surprised me was the capital investment, which was very hard only among manufacturers but also among non-manufacturers. "Nobuyasu Ata go, chief economist at Okasan Securities Co. "It's possible that foreign tourists, investments and the Olympics will boost capital investment."
Other Details
- The major manufacturers predict that the yen will trade at 107.26 the fiscal year ending in March 2019.
- Among the small manufacturers, the sentiment fell slightly to 14, while that service companies increased from 10 to 10.
- The Tankan was conducted from May 29 to June 29.
– With the help of Masahiro Hidaka, Connor Cislo and Yoshiaki Nohara
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