Tokyo, Dec 14 (IANS) The confidence of Japan’s large manufacturers in the country’s economic performance worsened in December compared to September, representing its fourth consecutive quarterly decline and placing the indicator at its worst level since April 2013, the Bank of Japan reported on Friday.
According to the Japanese central bank’s quarterly short-term economic survey of enterprises – known as Tankan – the confidence index among large manufacturing companies in December reached 0 points, 5 less than in September, following a three-point drop from June, the Efe news reported.
The outcome is worse than analysts’ forecasts and stands at the lowest level observed in this indicator since April 2013, when the BoJ launched its ultra-flexible monetary policy.
The confidence index among large companies in the non-manufacturing sector also lost one point compared to the second quarter of this year, down to plus 20.
The Tankan measures the percentage of companies that say business conditions are favorable, minus those that say the opposite, and is considered an important predictor of Japan’s economic growth.
The sustained decline of the indicator can be explained by the impact on the Japanese export sector of global economic uncertainty and in particular the prolonged US-China trade war.
In addition, Japan’s value-added tax increased from 8 percent to 10 percent in October, a measure that has hampered domestic demand.