The Bank of Japan’s tankan quarterly survey for December, due out Friday, is expected to show slightly weaker business sentiment among both major manufacturers and nonmanufacturers, according to forecasts by think tanks.
A slowdown in foreign economies, especially those of China and Europe, and the growing trend to spend less amid inflation, are weighing on sentiment, the 11 research institutes suggested.
According to their average estimate, the headline diffusion index for large manufacturers’ current sentiment will stand at plus 12, down 1 point from the previous September tankan reading.
While sentiment among automakers is seen improving thanks to an easing of supply constraints caused by testing fraud scandals, steel and other metal makers are believed to be struggling with sluggish demand from China.
“Exports lack momentum, pushing down business sentiment,” the Japan Research Institute said.
The average projection for leading nonmanufacturers’ current sentiment DI was plus 33, also down 1 point.
Sentiment in the dining and lodging sectors is expected to remain high thanks to robust demand from foreign tourists, but many businesses are worried about a loss of profit opportunities due to staff shortages, the Norinchukin Research Institute said.
Wage hikes are propping up business sentiment, but consumption growth remains limited by price increases, according to the Dai-ichi Life Research Institute.