Japanese manufacturers’ business sentiment worsened for the third straight quarter in July-September, according to a central bank survey, as the world’s third-largest economy battled rising costs, a plummeting yen and pandemic restrictions.
Big manufacturers’ business outlook fell to plus 8 in September from plus 9 in June, the Bank of Japan’s “tankan” survey showed on Monday.
Service sector sentiment improved slightly from three months ago, the survey showed, although retailers were less optimistic due to rising living costs stemming from higher commodity prices and the weakening yen.
The index measures corporate sentiment by subtracting the number of companies saying business conditions are negative from those that view them as positive.
Japan’s economy is under strain as the plummeting yen exacerbates cost of living pressures sparked by Russia’s invasion of Ukraine.
The declining value of the yen, which earlier this month hit a 24-year low against the US dollar, has driven up the cost of food and energy imports, burdening households and retailers.
Asia’s second-largest economy, which has struggled with stagnant growth for decades, is also grappling with more than two and a half years of pandemic-related border restrictions that are set to be lifted from October 11.
Japan’s economy grew an annualised 3.5 percent in the second quarter, but analysts expect it to have slowed in the third quarter as slowing global demand and rising materials costs sap exports and consumption.
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