By Leika Kihara and Tetsushi Kajimoto
TOKYO (Reuters) – Japanese manufacturers’ business mood worsened in the three months to September, a central bank survey showed on Monday, bolstering views that the weakening yen and its inflationary impact on business costs undermined a fragile economic recovery.
Adding to the gloom, fears of a global economic slowdown cloud the outlook for the export-reliant economy, which is still just emerging from the coronavirus pandemic.
Service-sector sentiment brightened a tad from three months ago, the Bank of Japan’s “tankan” survey showed, although retailers were less optimistic due to the rising cost of living blamed on higher commodity prices and the boost to import prices from the yen’s declines.
The headline index for big manufacturers worsened to plus 8 in September from plus 9 in June, the quarterly survey showed, compared with a median market forecast for plus 11.
Big non-manufacturers’ index stood at plus 14 in September, up from plus 13. It compared with a median market forecast for plus 13.
The country’s big manufacturers expect business conditions to improve three months ahead, while big non-manufacturers’ sentiment is seen worsening, the survey showed.
Japan’s economy expanded an annualised 3.5% in the second quarter as the lifting of COVID-19 restrictions boosted consumption. But many analysts expect growth to have slowed in the third quarter, as slowing global demand and rising raw material prices weigh on exports and consumption.
(Reporting by Leika Kihara and Tetsushi Kajimoto; Editing by Sam Holmes)
