TOKYO, Oct. 1 (Xinhua) -- Although component shortages were yet to be solved, business confidence among major Japanese manufacturers improved in September for a fifth straight quarter as the economy resumed from the COVID-19 downturn, local media citing the Bank of Japan (BOJ) reported Friday.
The key index measuring confidence among companies such as automobile and electronics makers in September rose to 18, the highest level since December 2018, from 14 in the previous quarter. It was higher than the average market forecast of 13 in a recent Kyodo News survey.
Moreover, the index for large nonmanufacturers including the service sector, battered by the COVID-19 pandemic, slightly increased to 2 from 1, improving for the fifth straight quarter.
Comparing with nonmanufacturers that have been slow in recovery due to protracted restrictions implemented to curb COVID-19 cases, manufacturers have led the come back from the shock of the COVID-19 pandemic.
The emergency measures in place until Thursday for Tokyo and other areas dragged down consumption of businesses such as restaurants, hotel operators and transportation services, as people were asked to refrain from making nonessential outings.
Confidence among automakers dropped to minus 7, decreasing 10 points from the previous survey.
Component shortages caused by factory shutdowns in Southeast Asia and tight supplies of semiconductors have limited the growth in the auto sector. Toyota Motor Corp., a leading Japanese automaker, has been reducing output.
Benefitting from the increase of commodity prices, the sentiment among firms in oil and coal as well as steel sectors also improved.
The Tankan index represents the percentage of companies reporting favorable conditions minus the percentage reporting unfavorable ones.
As the BOJ is expected to maintain its accommodative monetary easing for an extended period, Fumio Kishida, the newly-elected president of the ruling Liberal Democratic Party who is set to become the next Japanese prime minister, faces the challenge of charting a recovery for the COVID-19-hit economy.
According to the latest survey, the sentiment of manufacturers is expected to worsen to 14 from 18 while that of nonmanufacturers will likely improve to 3 from 2, as big manufacturers become cautious about the outlook.
The BOJ surveyed 9,360 companies in total, and 99.3 percent of them responded between Aug. 26 and Thursday. Enditem
