TOKYO: Japanese business confidence has weakened for the first time in nearly two years, the Bank of Japan said Wednesday, as the economy has been hit by a soaring yen and global economic uncertainty. The closely-watched quarterly Tankan survey showed sentiment worsening, albeit not as fast as expected, as global and domestic economic woes have sapped corporate optimism, particularly among exporters. In the survey, the confidence index for large manufacturers dropped to “five” from “eight” in September; the first fall in seven quarters but slightly better than market expectations of a reading of “three”. Japan, which heavily relies on exports of cars, electronics and machines, has been battered by a strong yen, which makes its goods less competitive abroad and erodes companies’ overseas profits when repatriated.
The yen has touched 15-year highs against the dollar in recent weeks and traded at 83.81 to the greenback in Tokyo on Wednesday morning. Economic growth in the July-September quarter this year was last week revised up to an annualised 4.5 percent, but government ministers warned growth would be “substantially lower” in the fourth quarter.
The Tankan- which surveys a total of more than 11,000 companies- also found that sentiment among large non-manufacturers fell to “one” from “two” in the previous survey, but it beat the expected score of “zero”.
