By Leika Kihara
TOKYO — Confidence among large Japanese manufacturers improved in the three months to June, a central bank survey showed, as firms maintained their bullish long-term spending plans, unfazed by the immediate potential hit from steep US tariffs.
However, manufacturers slashed their profit estimates and expect business conditions to worsen three months ahead, the closely watched “tankan” survey showed on Tuesday, suggesting firms see pain from US tariffs deepening later this year.
Sentiment among big non-manufacturers worsened slightly as some companies worried about rising labor costs, the impact of higher prices on domestic consumption and softening demand for luxury goods among overseas tourists.
The survey suggests the world’s fourth-largest economy remains relatively resilient, even with increasing global trade uncertainty. It will be one of the data points the Bank of Japan scrutinizes at its next policy meeting on July 30-31.
“The Q2 Tankan survey showed that the economy is holding up well despite trade tensions, which supports our view that the Bank of Japan will resume its tightening cycle before the end of the year,” said Marcel Thieliant, head of Asia-Pacific at Capital Economics.
The headline index measuring big manufacturers’ business confidence stood at +13 in June, up from +12 in March and beating a median market forecast for a reading of +10.
