Japanese manufacturers are slightly more optimistic despite Trump tariff
worries
[July 01, 2025] By
YURI KAGEYAMA
TOKYO (AP) — Business sentiment among large Japanese manufacturers has
improved slightly, according to a survey by Japan’s central bank
released Tuesday, although worries persist over President Donald Trump’s
tariffs.
The Bank of Japan’s quarterly tankan survey said an index for large
manufacturers rose to plus 13 from plus 12 in March, when it marked the
first dip in a year. The survey is an indicator of companies foreseeing
good conditions minus those feeling pessimistic.
Major manufacturers include auto and electronics sectors, whose exports
to the U.S. drive the Japanese economy.
U.S. auto tariffs are a worry for major manufacturers like Toyota Motor
Corp., but some analysts note global auto sales have held up relatively
well in recent months.
The U.S. has imposed 25% tariffs on auto imports. Japanese automakers
have plants in Mexico, where Trump has announced a separate set of
tariffs. The U.S. has also imposed 50% tariffs on steel and aluminum.
Japanese officials have been talking frequently with the Trump
administration, stressing that Japan is a key U.S. ally.
Trump posted on his social media site Monday that Japan wasn’t buying
enough rice from the U.S. “They won’t take our RICE, and yet they have a
massive rice shortage,” the president wrote, adding that a letter to
Japan was coming.
Also on Monday, National Economic Council director Kevin Hassett told
reporters at the White House that Trump “is going to finalize the
frameworks we negotiated with a whole bunch of countries after the
weekend.”
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The headquarters of Bank of Japan (BOJ) is seen in Tokyo, on Aug.
18, 2023. (AP Photo/Shuji Kajiyama, File)
 The Bank of Japan, which has kept
interest rates extremely low for years to encourage growth, is
expected to continue to raise interest rates, but some analysts
expect that to wait until next year.
The central bank raised its benchmark rate to 0.5% from 0.1% at the
start of this year and has maintained that rate. The next Bank of
Japan monetary policy board meeting is at the end of this month. The
tankan findings work as important data in weighing a decision.
The weak yen has raised the cost of materials for Japan at a time
when the U.S. dollar has been trading at around 140 yen, up
considerably from about 110 yen five years ago. A weak yen is a boon
for Japan’s exporters by boosting the value of their earnings when
converted into yen.
The tankan showed sentiment for large non-manufacturers fell to plus
34 from plus 35. That was better than some forecasts, which
projected a deeper decline.
The Japanese government reported last week that the nation’s
unemployment rate in May stood at 2.5%, unchanged from the previous
month.
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