Pessimism persists at big Japanese manufacturers amid global slowdown – Reuters Tankan

Big Japanese manufacturers remained pessimistic about business conditions for a third straight month in March, the closely watched Reuters Tankan survey showed. The results also reflect worry about slowing global growth that could hurt the country's export engine.

“The sentiment index for big manufacturers stood at minus 3, slightly up from minus 5 seen in the previous month, according to the survey conducted March 8-17,” reported Reuters.

Key results

Compared with three months ago, the manufacturers' index was down 11 points, suggesting worsening of sentiment in the BOJ tankan's headline big manufacturers index.

The Reuters Tankan index is expected to rebound to plus 10 over the next three months.

The large service-sector firms' index rebounded to plus 21 in March from plus 17 seen in the previous month. The index is expected to fall to plus 16 in June.

Service-sector firms' mood rebounded in a sign of domestic demand-driven recovery, in which the prospects of higher wages among big firms at the spring labour talks may encourage households to spend their way out of the COVID-induced doldrums.

The mixed results underscored the fragility of the world's No.3 economy as exports slow and private consumption, that accounts for more than half the economy, lacks momentum.

The central bank's survey due next April 3 will likely show deterioration in business confidence at big manufacturers.

USD/JPY stays pressured

USD/JPY holds onto the Fed-induced losses near 131.30, fading the bounce off previous low surrounding 131.00 by the press time.

Also read: USD/JPY drops on the dovish Fed 25 bp rate hike