Japanese Manufacturers’ Confidence Improved Slightly

A Reuters Tankan survey of business confidence on Tuesday showed that Japanese manufacturers were less pessimistic in August than they had been in at least four months, but indicated only a slow recovery from the coronavirus pandemic.

This highlights the mammoth task that policymakers face to pull the economy out of its deepest recession on record after the coronavirus pandemic undermined spending by businesses and households.

The survey, which closely tracks the Bank of Japan’s quarterly Tankan survey, indicated a modest recovery with expectations that manufacturers’ sentiment will improve in the coming months.

The survey concluded that manufacturers’ confidence rose to -33 in August from -44 the previous month, the highest level since February. The services sector index rose to -23 from -26. A negative reading means that the pessimists outnumber optimists.

Data on Monday showed that Japan experienced its steepest economic downturn on record in Q2 after the health crisis hit consumption and exports.

Some companies have warned of uncertainty in the coming months due to the return of trade tensions between the United States and China.