Japan Business Confidence

https://mainichi.jp/english/articles/20200312/p2g/00m/0bu/040000c

Article:

TOKYO (Kyodo) -- Business sentiment/confidence among large Japanese companies in the January-March period fell to the lowest level in five years and nine months amid growing concerns over the coronavirus spread, a government survey showed Thursday.

Comments and Ideas:

This is was not an unexpected situation. The Business sentiment and the consumer sentiment are always watched very carefully. A decrease in sentiment, or feeling, about the present or future does not always result in negative economic activity such as less investments, less machine orders etc. But this time, with the virus situation and the Olympics potentially in trouble, this time it might mean just that, less economic activity among large companies, and or less business to business or consumer to business activity now.

Article:

The confidence index covering firms capitalized at 1 billion ($9.6 million) or more stood at minus 10.1 in the first quarter of 2020, sharply down from minus 6.2 in the previous quarter, according to the joint survey by the Finance Ministry and Cabinet Office.

The index logged minus 14.6 in the April-June quarter of 2014, following the consumption tax hike from 5 percent to 8 percent on April 1 that year.

The index is calculated by subtracting the percentage of firms reporting worsening conditions from those observing improvements.

Looking forward, the index forecasting business conditions in the three months through June stood at minus 4.4, while that for the following quarter came to plus 4.2.

Comments and Ideas:

All things considered or all things equal, or under normal circumstances or normal economic activity, the business confidence index for Jan to March, would not have been too much of a surprise, if it was "all things equal," meaning just the normal business/economic activity such as the sales tax increase from 8 percent to 10 percent. But we now this is not normal business/economic activity with the virus situation.

I expect, unfortunately there will be more companies report worse conditions than better conditions in the future. I prefer to find the positive in all economic/business news, but with what is happening now, its not so easy.

Have a nice day and be safe out there!

© 2020, Tom Metts, all rights reserved