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By
YURI KAGEYAMA
TOKYO (AP) — The Bank of Japan gave a positive read on the
economy in its quarterly “tankan” survey Thursday, reporting
large manufacturers’ sentiment rose to 24 from 22.
The report, widely viewed as a key indicator on Japan ’s
economic vitality, said the sentiment among large
non-manufacturers fell to 35 from 37.
The survey show companies foreseeing good conditions minus those
feeling pessimistic. The key indicator of business sentiment has
now been improving for the sixth quarter straight.
The positive reading comes despite widespread challenges for
Japanese society, including soaring oil prices. The war in Iran
has effectively closed the Strait of Hormuz, where resource-poor
Japan had previously received most of its oil imports.
Brent is now trading at about $98 a barrel, lower than the
nearly $120 it reached earlier. That’s still higher than before
the war, when it was trading below $70 a barrel.
The Bank of Japan raised its benchmark interest rate twice this
year, in June and September, to 1.25%, a three-decade high. The
bank cited challenges stemming from a weak Japanese yen and
higher prices.
The central bank has been trying to normalize monetary policy
lately after decades of keeping interest rates near or below
zero.
Higher rates in theory support a stronger currency. But the
Japanese yen remains relatively weak, adding to the challenges
of rising import prices. The U.S. dollar has been trading at
nearly 160 yen, up from 110-yen levels five years ago.
Longer range problems for Japan include an aging society, which
has resulted in labor shortages and worries about economic
vitality in coming years.
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