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The
Bank of Japan’s “tankan” quarterly survey said an index for
large manufacturers that shows the percentage of companies
foreseeing good conditions minus those feeling pessimistic fell
to plus 12 from plus 14 in December, the first dip in four
quarters.
Major manufacturers include the key auto and electronics
sectors, whose exports to the U.S. are a major driver for the
Japanese economy.
A shrinking population has also dragged on Japan’s growth, while
rising wages and a tourism boom have helped.
U.S. auto tariffs are a worry for major manufacturers like
Toyota Motor Corp. and Nissan Motor Corp.
Prime Minister Shigeru Ishiba said Tuesday that his government
was engaged in last ditch efforts to get the United States to
exclude his country from auto tariffs. He said he was willing to
fly to Washington to directly negotiate with Trump if necessary.
The U.S. will begin collecting 25% tariffs on auto imports on
Thursday, with taxes on fully-imported cars kicking off at
midnight, U.S. time. The tariffs are set to expand to applicable
auto parts in the following weeks, through May 3.
Japanese automakers also have plants in Mexico. Trump’s tariffs
on imports from Mexico took effect last month.
The Bank of Japan holds a monetary policy meeting ending April 1
to mull further interest rate raises, and the tankan findings
will be among the key data looked at to make the decision.
Japan’s export-dependent economy has also been hit by slowdowns
in overseas demand, as well as rising material costs, worsened
by the weakening yen. The U.S. dollar has been trading near 150
yen, up considerably from 110-yen levels marked five years ago.
The tankan showed sentiment for large nonmanufacturers rose from
plus 33 to plus 35, boosted by healthy tourist traffic.
Also Wednesday, the Japanese government reported the nation’s
unemployment rate stood at 2.4%, a slight improvement from the
previous month.
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