BOJ “Tankan” Likely to Show Weaker Manufacturer Sentiment

Tokyo, June 24 (Jiji Press)–The Bank of Japan’s “tankan” quarterly survey for June is expected to show slight deterioration in business sentiment among major Japanese manufacturers, according to estimates by 13 private think tanks and securities companies. The think tanks and securities firms forecast on average that the diffusion index for current sentiment among large manufacturers will stand at plus 15 in the central bank’s June report, due out July 1, down 2 points from the previous March survey. Soaring prices for crude oil and petroleum products because of the conflict in the Middle East are believed to have weighed on business sentiment. “Business sentiment deteriorated mainly in the materials industry due to a surge in commodities prices,” Mizuho Securities Co. said. The DI is calculated by subtracting the percentage of companies reporting bad business conditions from that of those seeing good conditions. It would be the first decline in the headline DI reading in five quarters since March last year, when concerns over U.S. President Donald Trump’s tariffs were widespread. The forecasts show that the DI for major nonmanufacturers will be unchanged at plus 36. While construction firms were impacted by the Iran war, hotel and restaurant operators are believed to be supported by robust personal consumption. END [Copyright The Jiji Press, Ltd.]