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Japan's largest manufacturers lose confidence



TOKYO – Sentiment among Japan's major manufacturers weakened to the weakest level of nearly three years in the three months to June, including increasing US-China trade tensions, a central bank survey said Monday.

Main Index Measure Large manufacturers' feelings were at plus 7 in April-June, compared to plus 12 in the previous March survey, according to the Bank of Japan's quarterly tanker survey.

Reading was the lowest since September 2016 and lower than forecast for plus 9 from a poll of economists by data provider Quick. The index represents the proportion of companies that say the business conditions are favorable, unless they say the terms are unfavorable.

The survey was conducted between May 28 and June 28, among fears of a trade war between the United States and China. The result does not reflect the latest developments this weekend, when the United States agreed to abolish additional tariffs on Chinese goods indefinitely.

The survey showed that large producers expect the headline index to remain at 7 in the next three months, while non-producers estimate that it will worsen to 1

7 from June 23 in the June survey.

Expenditure plans by large corporations show that Japanese companies have not completely lost their confidence in the business relationship. They plan to increase their capital investment in the current fiscal year ending March 2020 by 7.4% compared to an increase of 1.2% planned three months ago.

Write to Megumi Fujikawa at megumi.fujikawa@wsj.com


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