Japan companies' predictions for the rest of the year. (image via Seattle Business Mag)

Business Sentiment Went Low in Japan

This might not be good news for Japan. After the trading dispute U.S. President Donald Trump had with China, Mexico, and European Union, global economists are predicting that the next target could be Japan. The prediction is based on a data that shows Japan has a trade imbalance with the U.S., as they buy $75 billion worth of goods in 2018, but sell $143 billion.

If the global economists’ prediction is right, this will be a repeated history between U.S. and Japan. Back in 1850s, there was a history of trade going on between the two countries, when American whaling shops needed supplies. However, things went back fine after the Second World War, where Japan was allowed to sell manufactured goods to the U.S.

Due to this trade dispute, many Japanese companies seem to be aware of the current situation. A survey was made for more than 14,500 companies to find out what they think about business prospects for the second quarter. Surprisingly, most of them are pessimistic about it.

From April to June 2019, companies think that their business has worsened compared to January to March. The Finance Ministry and the Cabinet Office revealed that the business sentiment index for April-June period stands at minus 3.7. This is due to U.S.-China trade dispute which affect Japan as well.

However, many companies are quite optimistic for the third and fourth quarters. The result shows that the index stands at plus 6.7 for the third quarter (July-September) and plus 0.4 for the fourth quarter (October-December).

Source: https://www3.nhk.or.jp/nhkworld/en/news/20190613_27/