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Business confidence among Japan’s larger manufacturers sagged further in the quarter ending September according to the Bank of Japan’s (BoJ) Tankan business survey.

Key highlights

Japanese businesses continue to feel the squeeze of global trade frictions, at least on the outlook side if not directly in the data, and business leaders continue to doubt the BoJ’s projections of economic expansion reaching the 2% target.

According to the Tankan survey, large firms plan to increase capital expenditure by 13.4%, down from the ┬áprevious quarter’s 13.6%, marking in the third straight quarterly decline in the survey results.

Japan’s domestic economy did manage to rebound in 2018’s second quarter, fueled by rising business spending after the first quarter’s contraction.

But escalating trade frictions and a series of natural disasters that disrupted supply chains cloud the outlook for the export-reliant economy. – Reuters