Japan Business Sentiment: Updated Sept. 12, 2025.

Japan firms' mood turns positive as tariff fears ease: gov't survey

Article source: https://mainichi.jp/english/articles/20250911/p2g/00m/0bu/026000c

Ideas

Japanese businesses have not had much to be positive about in recent months so maybe they see a little daylight at the end of the tunnel now with the improved tariff situation.

Japan in recent years, as lost a lot of market share to both Taiwan and South Korea related to semiconductor chips.

Unfortunately the Japanese economy has not been that robust and mostly has been stagnant for a very long time and it really doesn't look that good for the future.

Probably back in the April-June quarter there wasn't much to be positive about as the Trump tariffs were given in April and probably made most business exporters in Japan stressed.

An improvement doesn't mean much if companies don't do anything but its a good indication they think sales and profits are not going to be as affected as much from the tariffs, and they might improve their investments and hope to improve their exports, globally, and the US.

Sometimes it only takes some improved sentiment or an improved positive outlook for businesses and the economy to start growing again.

An economy is very complex with many different sectors and all of those sectors are not going to be all positive or even all negative as there is always going to be a mix of both positive and negative in an economy depending on companies circumstances.

It seems this time there are more positive that negative but again we don't know the exact numbers as it could 51 percent positive and 49 percent negative which is really not that much of a different between both,which means business sentiment, while improved still needs to improve more, if possible.

Japan is a heavy manufacturing economy compared to the US and the EU which have shifted more to a services and technology focused economies.

And yes, due to the tariffs, Japanese manufacturing is not going to be as positive as the non-manufacturing sector in Japan which is probably more focused on the domestic economy.

Japan, it seems for too long Japan has been focused on manufacturing while most economies, other than China, have  moved on from manufacturing and moved to a more balanced economy of some manufacturing, some services, and some technologies.

Normally, large major companies have more resources and can outlast most negatives in an economy except for of course normal market situations.

The problem is that small and mid-size companies don't have enough resource to outlast any major economic situations such as the tariff situation which is going to stress out many as they just don't have the needed resources to handle any real shocks in the economy.

Even though there were 11,000 companies that responded, and again, maybe not all of the 11,000 were 100 percent positive about the future of the economy or what is happening now with the tariff situation.

Again it could be 5,501, that were positive, and 4,999 that were negative about the future of the economy as it depends on each company's circumstances. 

These days, no economy is a buy only from the home country idea, but T and his ideas just don't match what is happening in the global economy these days. 

There are many many Japanese cars in the US as US consumers prefer a choice and not really interested in just a few car manufacturing models made in the US only.

The Japanese economy, while heaving dependent on exports and manufacturing have yet to find an new or different economic model or economic driver to growth its economy as technology companies and services, while improved in Japan haven't really turned into needed economic drivers to help with economic growth.

Small companies in Japan have been stress out for a very long time as they don't have enough resources to overcome all of the negatives that exists for them.

And ever since the pandemic they have faced increased raw material costs, increased energy costs and now and even before labor challenges related to the labor shortage and many Japanese workers wanting to work for large name-brand companies, which reduce the chances of getting good workers at small Japanese companies.

As a result small company profit margins have become too thin and they don't have any room to increase wages or even increase the minimum wage needed to hire good workers for their companies.

So there is no surprise that small Japanese companies are pessimistic and probably will continue to be pessimistic for a very long time.

Have a nice day!