Confidence among Japanese manufacturers rose in June and was steady in the services sector as resilient demand helped firms withstand pressure from high raw material prices, a Reuters poll showed, in a sign of a gradual economic recovery.
Reuters Tankan strongly correlates with the Bank of Japan’s (BOJ) quarterly Tankan survey, which found sentiment among manufacturing and service-sector firms was expected to improve over the next three months, though companies reported pressure from rising costs aggravated by a weaker yen.
Key quotes
The monthly poll of 499 large and mid-sized firms, of which 238 responded between June 1-10, comes amid uncertainty over the economic outlook in Asia as a result of China’s heavy-handed approach to stamping out COVID-19 outbreaks.
The Reuters Tankan sentiment index for manufacturers rose to 9 in June from 5 in the previous month, driven by chemical firms as well as metal products and machinery makers. It was expected to rise further to 12 in September.
The service-sector index was flat from the previous month at 13 in June, though firms in the sector also said they were burdened by higher input costs, which have been made worse by a weakening of the yen.
USD/JPY struggles
The news fails to gain any major attention from markets as the USD/JPY struggles to extend the latest run-up towards 136.00.
Read: USD/JPY faces hurdles around 135.60 as DXY turns sideways, the spotlight is on Fed
