The sentiment of Japanese manufacturers probably weakened in the last quarter of 2022 on sustained cost pressures and a bleaker global outlook, according to a Reuters poll of analysts on Friday.
As firms prepare for labour talks in early 2023, the world's third-largest economy will be hampered by shrinking business confidence. Wage hikes are seen as a way to revive the economy's feeble growth.
According to 17 economists, the Bank of Japan BOJ's closely watched tankan corporate survey is likely to show the headline index for big manufacturers' mood down for a fourth consecutive quarter to 6 in December from 8 in September.
Despite the weak yen-helped improvement in exports and the ease of supply bottlenecks for the auto sector, corporate profits are squeezed by a global economic slowdown and raw material cost hikes, said Takumi Tsunoda, senior economist at Shinkin Central Bank Research Institute.
The big non-manufacturers' confidence index likely extended growth to 17, the highest since late 2019 from 14, as face-to- face service operators cheered Japan's economic reopening from the Pandemic, according to the poll.
The poll showed that there isn't going to be a change in the mood of large manufacturers three months ahead, but service sector firms see a slight deterioration in their prospects.
The poll shows that big firms plan to increase capital expenditure by 20.9 per cent in the fiscal year ending March, slightly down from 21.5 per cent in the previous survey, with some analysts citing rising uncertainties over future business conditions.
The survey results will be released on December 14 at 8: 50 a.m. local time on December 15 at 8: 50 a.m. Dec. 15 at 8: 50 a.m. Dec. 15 at 8: 50 a.m. December 15 will likely show imports up 27.0 per cent and exports up 19.8 per cent year-on-year in November, which is a decline from the previous month's 53.5 per cent and 25.3 per cent increases, according to the BOJ.
The trade balance is expected to stay in deficit for the 16th straight month.
The poll showed that the annual wholesale inflation rate rose to 8.9 per cent in November, while core machinery orders, a leading indicator of business spending, likely grew 2.6 per cent month-on-month in October, the first increase in three months.