Japanese Manufacturers Sentiment Slides as Supply Bottlenecks Weigh

Japan’s manufacturers’ sentiment fell to a 7-month low in November Reuters Tankan survey showed. On the other hand the non-manufacturers index rose to +1, a 3-month high from -1 in October.

Japan’s manufacturers’ sentiment fell to a 7-month low in November Reuters Tankan survey showed. On the other hand the non-manufacturers index rose to +1, a 3-month high from -1 in October.

Japan Manufacturing

Reuters Tankan poll for November 2021

November manufacturers index

  • Ahead of the Bank of Japan’s (BOJ) Tankan quarterly survey due on December 13
  • November manufacturers index +13 vs +16 in October 7-month low
  • Supply bottlenecks weighing
  • By sector, sentiment deteriorated at firms manufacturing food products (0 vs +18 in October); metal products/machinery (+20 vs +34 in October); electric machinery (+23 vs +36 in October); precision machinery/others (+19 vs +20 in October); and chemicals producers (+33 vs +36 in October)

Japan Reuters Tankan Index

November Non-manufacturers index

  • November Non-manufacturers index rises to +1 from -1 in October 3-month high
  • Easing of coronavirus restrictions has been of benefit to service firms, but demand is yet to return to pre-covid levels
  • Manufacturers February 2022 index seen at +19 non-manufacturers +15
  • Poll of 502 firms 254 responses survey taken October 26 – November 5

The Reuters Tankan index readings are derived by subtracting the percentage of respondents who say conditions are poor from those who say they are good. A negative reading means that pessimists outnumber optimists.

The Bank of Japan will remain under pressure to hold steady, and even add to, its easing measures.

  • The downturn is a reflection of weakness both domestically and overseas.
  • New export business has fallen for most of the year, which firms attributed to challenging economic conditions
  • Increasing rate of contraction at key trading partners such as China, as well as greater competition internationally.
  • Stocks of both finished goods and inputs declined amid concern towards heightened tensions over the Coronavirus in China, as well as the uncertainty in Europe with Brexit..

Source: ReutersReuters

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