https://www3.nhk.or.jp/news/html/20220401/k10013561881000.html

Bank of Japan Tankan Economic Judgment of Large Companies Deterioration for the First Time in 7 Quarters in both Manufacturing and Non-Manufacturing I

According to Tankan (Corporate Short-term Economic Observation Survey) released by the Bank of Japan, the index showing the economic judgment of large companies deteriorated for the first time in 7 quarters in both manufacturing and non-manufacturing industries. It has become clear that the further rise in raw material prices triggered by Russia’s invasion of Ukraine has become a burden on the economy.

The Bank of Japan's Tankan is a survey that asks nearly 10,000 domestic companies about the current state of the economy every three months, and subtracts the percentage of companies that answered "bad" from the percentage of companies that answered "good". The index is used to judge the economy.

This survey was conducted from late February to March 31st.

According to this survey, the index of the manufacturing industry of large companies was +14 points, which was 3 points worse than the previous survey in December last year.

In addition, the economic judgment of the non-manufacturing industry of large companies also deteriorated by 1 point from the previous time to +9 points.

This is the first deterioration in seven quarters since the June 2020 investigation, which was affected by the first state of emergency declared by the spread of the new corona virus in both manufacturing and non-manufacturing industries.

The deterioration is due to the fact that the economic judgments of the two companies affected by the first emergency declaration issued by the spread of the new corona virus infection in both manufacturing and non-manufacturing industries have continued to pick up, but Russia's Ukraine It became clear that the price of raw materials soared in the wake of the invasion put pressure on corporate profits and put a burden on the economy. This is the first time in seven terms since the survey in June 2020.

Furthermore, in the outlook three months later, the manufacturing industry of large companies is expected to deteriorate by 5 points, and the non-manufacturing industry is expected to deteriorate by 2 points, and the spread of infection and soaring raw material prices continue to cast a shadow over the future.

The Bank of Japan is replacing the companies subject to the Tankan survey in order to accurately grasp the actual state of the economy, and in this survey, the target companies were reviewed for the first time in four years.

Based on this, if we recalculate the index published last time in December last year, the index of large companies/manufacturing industry will change from +18 points to +17 points, and the index of large companies/non-manufacturing industry will change from +9 points to +10 points.

The previous index for large corporations and manufacturing industries was "flat" compared to the previous survey in September last year, but the Bank of Japan said that this evaluation would not change, and explained that this would be the first deterioration in seven quarters.

Source: https://www3.nhk.or.jp/news/html/20220401/k10013561881000.html