December 1, 2008 / 11:37 PM / 11 years ago

Record fall for Japan manufacturer mood-Reuters Tankan

 (Click on [ID:nT152332 ] for table)
 By Shigeo Kodama
 TOKYO, Dec 2 (Reuters) - Confidence among Japanese
manufacturers fell at its sharpest pace on record to its worst
pessimism in nearly seven years in November, a Reuters poll
showed on Tuesday, as Japan grapples with its first recession in
seven years.
 The monthly poll of major Japanese firms, which tracks the
Bank of Japan's closely watched quarterly tankan next due on Dec.
15, is another sign of a deeper and longer recession, as the
financial crisis dries up demand for Japanese exports.
 Underlining the woes at many Japanese firms, the BOJ will
hold an emergency policy meeting from 1 p.m. (0400 GMT) on
Tuesday to discuss measures to help ease a squeeze in financing
for many firms, to be followed by a news conference by Governor
Masaaki Shirakawa at 3:30 p.m. (0630 GMT).
 The yen's rise against major other currencies and worsening
demand both at home and abroad helped push manufacturers'
sentiment down to minus 42 from minus 25 in October in the
Reuters Tankan, the biggest monthly drop on record.
 The last BOJ tankan showed Japanese business sentiment
turning pessimistic for the first time in five years, hit by the
global slowdown and financial turmoil.
 The November reading was the lowest since March 2002, when it
was minus 47 around a time when Japan started emerging from its
last recession, triggered by the burst of global bubble.
 "We are suffering from a triple blow of a stronger yen, high
raw materials costs and output adjustments at our clients," an
official at an electric machinery maker said in the survey of 231
firms taken Nov. 12-27.
 Manufacturers forecast business conditions will improve
slightly in the next three months but still expect to extend
their run of pessimism from the current seven months.
 The Reuters Tankan showed sentiment in the service sector at
its lowest point since August 2003, with the index down seven
points at minus 16.
 Non-manufacturers see their situation worsening further.
 The Reuters Tankan comes days after figures showing Japanese
industrial output fell sharply in October and manufacturers were
forecasting record falls in output in the coming months,
prompting warnings that growing global gloom means Japan's
recession will be even deeper and longer. [ID:nT133784]
 Morale among makers of autos and transport machinery, and
electrical goods -- main players behind Japan's export-driven
expansion in recent years -- were hit hard by falling demand for
their products on a slowdown in the United States and other parts
of the world.
 Sentiment for the autos/transport equipment sector fell to
minus 75 from minus 22 in October, marking the lowest reading
since October 1998, when Japan was caught up in a banking crisis.
The index for electric machinery fell 16 points to minus 46, the
lowest since March 2002.
 Compared with September, around the time of the last BOJ
tankan survey, the index fell 28 points for manufacturers and 6
points for non-manufacturers.
 The index readings are derived by subtracting the percentage
of respondents who say conditions are poor from those who say
they are good. A negative index figure means most of those
surveyed are pessimistic about conditions.
 (For more stories on the financial crisis click [ID:nCRISIS])
 (Writing by Tetsushi Kajimoto; Editing by Michael Watson)

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