The Bank of Japan’s annual Tankan survey reveals that Japanese business sentiment is growing more pessimistic among manufacturers. Non-manufacturers — those in the service and retail sectors — are feeling a bit more buoyant.
“Manufacturing output here fell by 1.3 percent in August, that’s much more than was expected,” says Rupert Wingfield-Hayes, the BBC’s correspondent in Tokyo. “Japan’s economy — certainly its famous manufacturing economy — is seeing quite a dramatic slowdown. There are fears here that Japan could fall into recession.”
The manufacturing slowdown in Japan comes as the nation continues to feud with China over who owns the uninhabited Senkaku Islands.
“In the last few years, China has become Japan’s No. 1 export market, so political fallout — if it continues to be serious — could have really big knock-on effects for the Japanese economy. Chinese people at the moment simply don’t want to go out and buy Japanese products,” says Wingfield-Hayes. “There’s a real potential for a problem for Japan from this island dispute.”
There’s a lot happening in the world. Through it all, Marketplace is here for you.
You rely on Marketplace to break down the world’s events and tell you how it affects you in a fact-based, approachable way. We rely on your financial support to keep making that possible.
Your donation today powers the independent journalism that you rely on. For just $5/month, you can help sustain Marketplace so we can keep reporting on the things that matter to you.
