Japan’s Tankan index has fallen for two quarters in a row – Unemployment rate rose for the first time in four months

The Bank of Japan (BOJ) reported that the business conditions for Japan’s large manufacturers fell for the second consecutive quarter in the second quarter of 2022, reflecting the impact of higher production costs. This includes supply chain bottlenecks caused by China’s lockdown measures to combat the Covid-19 outbreak.

Business conditions for Japan’s major manufacturers (Tankan) for the second quarter, which include automakers and electronics manufacturers, were 9, down from 14 in the first quarter.

The Tankan score for large non-manufacturing firms, including the service sector, was 13 in the second quarter, down from 9 in the first quarter.

According to the BOJ, major Japanese manufacturers are expected to increase capital spending by another 18.6% in the current fiscal year, which ends in March.

The Tankan index will be among the information the BOJ will consider at its next monetary policy meeting on July 20-21.

The Japanese economy is expected to weaken in the current quarter due to the impact of the lockdown in China as well as higher raw material costs and the supply chain congestion problem affecting industrial production.

Japan’s Ministry of Economy, Trade, and Industry (METI) announced yesterday that industrial production fell 7.2% in May, the sharpest decline in two years.

While the unemployment rate rose for the first time in four months.

Japan’s Ministry of Internal Affairs and Communications reported that the unemployment rate rose to 2.6% in May from 2.5% in April, the first increase in four months.

Japan’s Ministry of Health, Labor and Welfare announced that the job vacancy-to-applicant ratio was 1.24, up 0.01 percentage point from April and increasing for the fifth consecutive month.

The seasonally adjusted number of jobs rose to 67.24 million, 140,000 fewer than in April.

The total number of unemployed in May was 1.8 million, 40,000 higher than in April.

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