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Japan Inc. Sentiment Soars to 5-Year High
1 Jul
Summary
- Big manufacturers' business sentiment reached highest level since March 2018.
- Non-manufacturers' mood also improved, nearing a record high from 1991.
- This positive outlook influences the Bank of Japan's upcoming policy decisions.
Big Japanese manufacturers reported their most optimistic business sentiment since March 2018 in the quarter ending June. The key index rose to +22, surpassing market expectations and signaling the economy's current ability to withstand energy price shocks originating from the Middle East.
Meanwhile, the mood among big non-manufacturers also saw an uptick, reaching +37 and nearing a record high not observed since August 1991. This broad-based improvement in business confidence is a significant development.
The Bank of Japan, having recently raised interest rates to a 31-year high in June as part of its policy normalization, will closely monitor these economic indicators. The positive sentiment data will be among the factors considered at their upcoming policy meeting on July 30-31.
