A Bank of Japan official comments on the divergence seen in the Tankan:
- Many manufacturers cited rising raw material and fuel costs, overseas economic slowdown and weak chip demand as factors weighing on sentiment
- Non-manufacturers cited the fading impact of covid-19 pandemic, and govt tourism subsidies as contributing to the improvement in sentiment
The background to this is what was noted in the Q1 Tankan report:
- big manufacturers' sentiment index hits lowest level since Dec 2020
- big non-manufacturers' sentiment index hits highest level since Dec 2019
- big manufacturers sentiment index worsens for fifth straight quarter
Tankan post is here.
