JAKARTA - The confidence of Japanese large manufacturers rose to the highest level in eight years. Strong demand for chips and artificial intelligence or AI is the main support, although business actors are still overshadowed by the risk of Middle East conflict.
Launching a report by Kyodo News, Wednesday, July 1, the Bank of Japan's Tankan survey released Wednesday showed that the large manufacturers' sentiment index rose to 22 in June, from 17 in March. Tankan is the Bank of Japan's quarterly survey to read the conditions and business operators' confidence.
The increase was the fifth in a row and exceeded market expectations of 16. The index measures the confidence of large companies, including the automotive and electronics sectors.
However, the Bank of Japan expects the index to fall again to 17 in September.
The survey was conducted on 9,141 companies from May 28 to Tuesday. About 70 percent of respondents had answered before June 11, before the initial agreement between the United States and Iran to end the war.
BOJ officials said businesses still needed time to adjust business plans, even though an agreement had been reached.
The biggest concern still comes from the Middle East. Conflicts have caused crude oil prices to soar and disrupted energy supplies. This condition is putting pressure on many sectors, especially those that rely on raw materials and energy.
On the other hand, demand for chips and AI has actually lifted many industries. General machinery, production machinery, business machinery, electrical equipment, non-ferrous metals, iron and steel, chemicals, and textiles reported strong orders for chip-making devices and supporting materials.
According to Kyodo News, some companies have also started to pass on the increase in raw material costs to selling prices so that profit margins are not too depressed. Some sectors even received additional orders as buyers accelerated purchases to secure supplies.
Sentiments of chemical manufacturers rose to 20 from 14. The confidence of manufacturers of production machinery jumped 10 points to 36. In contrast, the petroleum and coal products sector fell to 9 from 18, while motor vehicles fell one point to 12.
The large non-manufacturing sector, including services, also improved. Its index rose to 37 from 36, marking the first increase in five quarters.
The accommodation, food, and beverage sectors were also driven by foreign tourist growth. Sentiment rose sharply to 46 from 34.
However, construction and real estate weakened due to rising raw material costs as a result of the Middle East situation.
All companies surveyed, including small and medium-sized businesses, raised their inflation forecasts by 0.1 percentage point for one, three, and five years ahead. The projections were 2.7 percent, 2.6 percent, and 2.6 percent, respectively.
The Tankan index is calculated from the difference in the percentage of companies that assess business conditions as good and companies that assess business conditions as bad.
The English, Chinese, Japanese, Arabic, and French versions are automatically generated by the AI. So there may still be inaccuracies in translating, please always see Indonesian as our main language. (system supported by DigitalSiber.id)
Most Popular Tags
#Prabowo Subianto #donald trump #2026 World Cup #venezuela #Bhayangkara hut #konflik timur tengahPopular
