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Japan Times
01-04-2025
- Automotive
- Japan Times
Japanese businesses maintain optimism ahead of looming tariff storm
Large Japanese businesses remained optimistic in the first quarter even as the United States threatened heavy tariffs on products made by these companies. In the Bank of Japan's tankan survey, released on Tuesday, the headline index for big manufacturers was 12, which indicates confidence in the business outlook. The number was down from 14 in December — and was the first drop since the first quarter of 2024 — but some analysts put a positive spin on the news. "Because of the U.S. tariff hikes and the slowdown in overseas economies, the reading was expected to drop, particularly in the materials sector," said Shunpei Fujita, an economist at Mitsubishi UFJ Research & Consulting. Strength was reported in some subcategories. For automakers, sentiment improved to 13 from 8, and while the confidence score for the second quarter was a 9, Fujita said the industry appeared more optimistic than expected. Most of the companies surveyed responded by March 12. At the time, it was still unclear whether Japan would be a target of the auto tariffs, so it is possible that the poll does not fully reflect the current situation. The most recent tankan survey, conducted between Feb. 26 to March 31, polled nearly 9,000 companies. In the tankan, participating companies are asked whether business conditions are 'favorable,' 'not so favorable" and 'unfavorable." Positive readings mean those answering favorable have outnumbered companies answering unfavorable. As more than 99% of companies polled normally respond to the questionnaire, the data is considered to be of a very high quality and an accurate reflection of the situation on the ground. In addition to 25% duties on steel and aluminum imports, U.S. President Donald Trump announced last week that 25% tariffs will be placed on all autos and auto parts imported into the United States from this Thursday. He is also expected to announce a major round of reciprocal tariffs this week in what he is calling "Liberation Day." 'It's very possible that sentiment will deteriorate further among large manufacturing companies,' Fujita said. Given that the impact of the tariffs remains unclear, Fujita added the results of the first-quarter survey will not factor greatly into the BOJ's decision-making process. 'I believe the bank's stance of cautiously raising rates due to the uncertainty surrounding the impact of the U.S. tariffs is unchanged," he said. The BOJ kept rates unchanged in its policy meeting last month. In a Bloomberg survey last month, July was the top pick for the next rate increase, with 48% forecasting it as the most likely month for the bank to make the next move higher. The tankan survey also showed that current business conditions for large nonmanufacturing companies improved to 35, the highest level since August 1991, compared to 33 in December, due to booming inbound tourism and companies being able to pass on increasing costs to customers. "There have been various negative factors, such as labor shortages and rising interest rates, so the fact that reading has further improved is quite surprising," Fujita said.
Yahoo
21-02-2025
- Business
- Yahoo
Tokyo inflation likely eased in Feb on govt steps amid inflation pressure: Reuters Poll
TOKYO (Reuters) - Consumer inflation in Tokyo likely slowed down in February as the government reinstated steps to ease the burden from energy bills as higher living costs haunt persistent inflation presser, a Reuters poll showed on Friday. The core consumer price index (CPI) in Tokyo, a leading indicator of nationwide price trends, was seen rising 2.3% year-on-year this month, slowing down from a 2.5% gain in January, the median forecast of 16 economists found. "While food prices continue to rise, the pace of increase in core CPI is expected to slow due to lower electricity and gas prices led by the resumption of government support," said Shunpei Fujita, economist at Mitsubishi UFJ Research and Consulting. Data on Friday showed Japan's nationwide core consumer price index rose 3.2% in January from the previous year to hit a 19-month high, reinforcing expectations the central bank will continue to raise interest rates from still-low levels. For nearly three years, inflation has exceeded the central bank's target of 2%, underlining rising inflationary pressure. In January, the BOJ raised its short-term interest rate to 0.5% from 0.25%, the highest in 17 years, reflecting its conviction that rising wages will keep inflation stable at its 2% target. Governor Kazuo Ueda has signalled his readiness to keep raising rates if price outlook continues to improve. The internal affairs ministry will release Tokyo CPI data at 8:30 a.m. on February 28 (2330 GMT February 27). Japan's industrial output will likely show a 1.2% fall in January from the previous month, down for a third month, reflecting sluggish activity in the global manufacturing sector, according to the poll. Retail sales are expected to have increased 4% in January from a year ago, the strongest pace of gain since February last year, helped by solid auto sales, the poll showed. The trade ministry will publish factory output and retail sales at 8:50 a.m. on February 28 (2350 GMT February 27). Sign in to access your portfolio
Reuters
21-02-2025
- Business
- Reuters
Tokyo inflation likely eased in Feb on govt steps amid inflation pressure
TOKYO, Feb 21 (Reuters) - Consumer inflation in Tokyo likely slowed down in February as the government reinstated steps to ease the burden from energy bills as higher living costs haunt persistent inflation presser, a Reuters poll showed on Friday. The core consumer price index (CPI) in Tokyo, a leading indicator of nationwide price trends, was seen rising 2.3% year-on-year this month, slowing down from a 2.5% gain in January, the median forecast of 16 economists found. "While food prices continue to rise, the pace of increase in core CPI is expected to slow due to lower electricity and gas prices led by the resumption of government support," said Shunpei Fujita, economist at Mitsubishi UFJ Research and Consulting. Data on Friday showed Japan's nationwide core consumer price index rose 3.2% in January from the previous year to hit a 19-month high, reinforcing expectations the central bank will continue to raise interest rates from still-low levels. For nearly three years, inflation has exceeded the central bank's target of 2%, underlining rising inflationary pressure. In January, the BOJ raised its short-term interest rate to 0.5% from 0.25%, the highest in 17 years, reflecting its conviction that rising wages will keep inflation stable at its 2% target. Governor Kazuo Ueda has signalled his readiness to keep raising rates if price outlook continues to improve. The internal affairs ministry will release Tokyo CPI data at 8:30 a.m. on February 28 (2330 GMT February 27). Japan's industrial output will likely show a 1.2% fall in January from the previous month, down for a third month, reflecting sluggish activity in the global manufacturing sector, according to the poll. Retail sales are expected to have increased 4% in January from a year ago, the strongest pace of gain since February last year, helped by solid auto sales, the poll showed. The trade ministry will publish factory output and retail sales at 8:50 a.m. on February 28 (2350 GMT February 27).
Reuters
14-02-2025
- Business
- Reuters
Japan inflation likely hit 17-month-high in January on rising food prices: Reuters poll
TOKYO, Feb 14 (Reuters) - Japan's core consumer price inflation likely accelerated in January from the previous month and rose at the joint-fastest pace in 17 months due to high food prices and reduced energy subsidy, a Reuters poll showed on Friday. The core consumer price index (CPI), which includes oil products but excludes fresh food prices, was expected to have risen 3.1% in January from a year earlier, a poll of 18 economists showed. That compared with December's 3% rise and would be the joint largest year-on-year increase since August 2023 when it was 3.1%. "With food prices continuing to rise and government subsidies to oil refiners being reduced, the year-on-year increase is expected to widen from the previous month," said Shunpei Fujita, an economist at Mitsubishi UFJ Research and Consulting. The prices of rice, vegetables and other basic necessities have soared in recent months, and the government has said it will release 210,000 metric tons of stockpiled rice to ease distribution clogging and stabilise prices. The internal affairs ministry will release January CPI data at 8:30 a.m. on February 21 (2330 GMT on February 20). The poll also showed exports were expected to have climbed 7.9% in January from a year earlier, picking up from a 2.8% increase in December. Imports were estimated to have expanded 9.7% in January from a year earlier, resulting in a trade deficit of 2.1 trillion yen ($13.76 billion). Imports rose 1.8% in December. "The trade balance is significantly in deficit in January, as exports tend to be seasonally low," said Takumi Tsunoda, senior economist at Shinkin Central Bank Research Institute. Machinery orders, a highly volatile but leading indicator of capital spending for the coming six to nine months, probably edged up 0.1% in December from the previous month, following a 3.4% gain in November, according to the poll. The government will release the trade and machinery orders data at 8:50 a.m. on February 19 (2350 GMT on February 18). ($1 = 152.6300 yen)
