Japan manufacturers’ sentiment positive for second month

Business sentiment at big Japanese manufacturers edged up in June, staying in positive territory for a second straight month and reflecting a post-COVID economic recovery though uncertainty remains high amid slowing global growth for June.

Following the release, USD/JPY stretches the previous day’s retreat from the highest level in seven months to 141.30 heading into Wednesday’s Tokyo open.

The sentiment poll also said that there would be a steady recovery in business sentiment in the Bank of Japan’s (BOJ) closely watched Tankan quarterly survey due next on July 3.

“In the Reuters poll of 493 large companies, of which 232 responded on condition of anonymity, many firms cited the post-COVID rebound in demand as a positive factor, while risks stemmed from overseas economies,” adds the update.

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Manufacturers’ mood was expected to rise over the coming three months, and service-sector morale would hover above +20.

The sentiment index for manufacturers stood at +8, up 2 points from the previous month, led by textiles/papers, oil refinery/ceramics, food processing and auto industry, according to the survey, conducted from June 7-16.

The manufacturers’ index was up 11 points compared with three months ago. The index is expected to rise to +13 in September.