Japan Business Sentiment Down for 2nd Straight Month in May

June 6, 2018

Tokyo- Japan's business sentiment worsened for the second straight month in May as higher oil prices raised cost burdens on companies and individual consumers, a private-sector survey showed Tuesday.

The business sentiment diffusion index fell 0.4 point from the previous month to 49.4, said the survey, conducted by Teikoku Databank Ltd. for two weeks through the end of May.

Of the 10 industrial sectors covered by the survey, retail and five others posted declines in their respective indexes.

The retail sector saw higher food prices and energy bills dampen consumer sentiment. Its index fell 2.6 points to 42.0, the largest decline since April 2014, when the consumption tax rate was raised from 5 pct to the current 8 pct.

Business sentiment suffered setbacks in eight of the 10 regions, including Kyushu in southern Japan, the northern part of Kanto in eastern Japan and Kinki in western Japan. Sentiment was flat for Tokai in central Japan and Chugoku in western Japan.

Looking ahead, Teikoku Databank stressed the need to closely watch the possibility that overseas risks will put downward pressure on the Japanese economy.

The survey received valid responses from some 10,000 firms, or 43.2 pct of the total. Jiji Press