Business Sentiment Improves in July-Sept.

Jiji Press

11:09 JST, September 14, 2023

TOKYO (Jiji Press) — Business sentiment among major Japanese companies improved in July-September, driven by a recovery in automakers and other manufacturers, a government survey showed Wednesday.

The business sentiment index for companies with capital of ¥1 billion or more rose to plus 5.8 from plus 2.7 in the previous quarter, according to the joint survey by the Finance Ministry and the Cabinet Office.

“The outcome reflects a continued moderate recovery in the economy,” a ministry official said.

The index represents the percentage of companies seeing their business conditions improve from the previous quarter minus that of firms feeling the opposite.

The index for large manufacturers gained to plus 5.4 from minus 0.4, the first positive figure in four quarters, as the easing of semiconductor shortages lifted sentiment in the auto industry.

For large nonmanufacturers, the index rose to plus 6.0 from plus 4.1, led by services and real estate firms following the economy’s reopening from the COVID-19 pandemic.

The sentiment index stood at plus 6.1 for midsize companies, and at minus 5.5 for small companies.

The index for major companies is expected to advance further to plus 7.3 in October-December before slightly falling back to plus 6.2 in January-March 2024, according to the survey.

The survey also showed combined sales at all companies are expected to grow 2.7% in fiscal 2023, which ends in March next year, from the previous year.

Producer prices up 3.2%

Producer prices in Japan rose 3.2% from a year before in August, up for the 30th straight month, lifted by higher crude oil prices, the Bank of Japan said Wednesday.

But the rate of growth decelerated for eight months in a row, hitting the lowest level since March 2021.

The producer price index, which measures costs of goods traded between businesses, came to 119.6 against 100 for the base year of 2020, the central bank said.

The decelerating pace of growth apparently reflects slowing moves to pass on higher costs to product prices as well as government measures to reduce the burden of rising electricity and gas bills on households.