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Japan’s car market recovers

Manufacturers least pessimistic since July 2019 going into latest lockdowns.
Posted on 21 January, 2021
Japan’s car market recovers

Sentiment among Japanese manufacturers stabilised in January to the least pessimistic in more than a year from the impact of Covid-19.

However, service-business leaders became gloomier just as new lockdowns hit most of the population.

Manufacturers in the world’s third-biggest economy were the least pessimistic since July 2019, although the outlook – especially for services – is clouded by a pandemic state of emergency covering Tokyo and other population centres until February 7.

Driving the improvement for manufacturers were upbeat views in the chemical, metal products and electric machinery sub-sectors.

It has been reported that the car market is rapidly recovering, especially in China, and demand for electronic parts is growing.

The findings have been published following a Reuters Tankan poll with what’s known as the “sentiment index” for manufacturers rising to -1 from -9 in the previous month, while the service-sector index fell to -11 from -4 in December.

The survey was run from December 24 to January 13. The Reuters Tankan index readings are derived by subtracting the percentage of respondents who say conditions are poor from those who say they are good. A negative reading means pessimists outnumber optimists.

Japan’s economy surged an annualised 22.9 per cent in the third quarter, rebounding from its deepest post-war slump in the July-September period when the pandemic crushed economic activity.

The government had already committed to spending the equivalent of about NZ$4.22 trillion to bolster the economy before Prime Minister Yoshihide Suga this month announced a second state of emergency.

This covers Tokyo, Osaka, Kyoto and other areas accounting for 55 per cent of Japan’s population.

The Tankan survey showed overall sentiment for the manufacturing sector was poised to fall again, with business confidence expected to edge down to -2 in April.