AI Demand and Big Companies in Japan. Updated July 20, 2026

AI demand pushes Japan big manufacturers' business confidence to 8-yr high

Ideas

It seems that Japan, just maybe, has finally found another economic driver in chips and artificial intelligence which its been searching for, for a very long time and maybe it can now diversify its export portfolio away from just autos and auto parts.

Japanese companies, especially the large name-brand companies have not had much to be confident about in a very long time but now it seems companies have finally found the needed confidence they have been lacking for so many years.

Even though there 9,141 companies in the survey there is going be a significant different among companies as they don't feel or see everything the same way as another important idea is not all companies are at the same stage in development or growth which can affect what they think and feel about the future.

And as we all know now, the situation in the Middle East has not be resolved and looks like its not going to be resolved anytime in the future which means every supplies might continue to be compromised, supply chains will continue to be compromised and global prices, at least for the time being, are going to remain relatively high.

There are many industries and supply chains related to many industries that are being adversely affected but at the same time, there might be some industries that have not been affected but again most likely every industry and supply chain globally has been affected whether a lot or just a little.

And then there is the chip making sector, which to Japan's credit, as been able to get back into the global game in a big way and is now has maybe become Japan's # 2 or # 3 export economic driver, which significantly improves economic growth, after Japanese cars and Japanese car parts.

Yes, it seems most companies now are passing on their increased material costs to the next in the supply chain including the final retail customer, even though, for a very long time, Japanese companies were very reluctant to pass on their costs to the next in the supply chain including the final retail customers, as now they feel they have no choice as their profits margins keep getting thinner and thinner over time.

Many years ago and maybe even now Japanese companies used to think that customers were like family and even stake-holders within the company, while they might still think that way, those days for many companies those ideas might be long gone as now shareholders have more say in what companies should do and they want to see robust quarterly results compared to companies only caring about customers and employees in the past.

There is always going to mix or difference in sentiment among different sector or differences among companies in the same sectors as all companies have a different environment and different circumstances which can easily affect their sentiment.

As far as non-manufacturers are concerned or the service sector as they usually have very thin profit margins as they are operating on a very different level than those companies in the manufacturing sector which usually have much larger profit margins to work with.

As such service sector companies usually have less to work with which means their salaries might be much lower which means, overall, they might not get the best talent and or they might have to pay even more to get the best talent which means their profits margins are going to be stressed out a lot.

But if sentiment is up among service sector companies it might be that consumer spending has increased significantly and or the influx of foreign tourists into Japan as increased to the point many companies in Japan are feeling the affects of all the spending made by foreign tourists.

Yes, most likely the accommodation and restaurant services sector has seen a huge increase in foreign consumer spending which has been very beneficial for the Japanese economy, despite some in Japan, who now think over-tourism is a major problem, when in reality, like in all countries, there are unfortunately a few foreign tourists who don't have good manners or don't seem to know what is right or even wrong related to things culturally in other countries.

And of course every sector, globally, is being affected by the Middle East situation, including those sectors which you would think have no relation to that region but its seems all economies, globally,, now matter where it is being affected one way or another.

Globally, there is a world of difference between small, medium, and large companies as their environments are much different and how they see the world is much different, and for some small or many small companies and maybe even many medium size companies they only have to worry or think about their customers and their employees compared to some or many large companies that also have to be concerned about what their shareholders think which can completely change their dynamics compared to small and mid-size companies in Japan, which probably focus on customers as stakeholders and even employees as significant stakeholders within their company.

And as such each company whether small or mid-size, or large might see inflation differently as maybe large companies have the resources needed to overcome inflation while the small and mid-size companies might not have the needed resources to overcome even the smallest increase with inflation.

Have a nice day!

Article source:   https://mainichi.jp/english/articles/20260701/p2g/00m/0bu/016000c