Analysts predict Japan’s business sentiment will worsen in a survey to be released by the country’s central bank on October 1. They expect the manufacturing and non-manufacturing sectors to weaken. They cite the US-China trade dispute and a planned tax hike in Japan for the souring mood.
Analysts at 14 private-sector institutions compiled forecasts for the Bank of Japan’s quarterly Tankan survey. The bank asks executives at about 10,000 companies for their views on the country’s economy.
All analysts expect a fall in the Tankan’s key index for major manufacturers. The predictions range from minus 2 to plus 4 points, down from plus 7 in June. A plus number indicates optimism about the economy.
For the index of major non-manufacturers, 12 analysts expect a decline from June’s plus 23. The forecasts range from plus 17 to plus 25.
The analysts say the US-China trade friction is adding to pessimism. They say the dispute is hurting Japan’s production and exports.
Japan’s planned hike in the consumption tax will likely damage sentiment in the service industry, including retailers, hotels, and restaurants. The tax rate is set to rise to 10 percent from 8 percent in October.