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Reuters’ Tankan manufacturing index survey for November showed that manufacturing activity in Japan continues to decline, largely owing to auxiliary knock-on effects from the US-China trade war.

November’s Manufacturing Index came in at 26, a decline from October’s 28, although the Non-Manufacturing Index climbed to 30 from October’s 24 reading. The forward outlook for the Japanese Tankan survey is likewise negative, with the February manufacturing index expected to remain strapped to 24, while the non-manufacturing result is expected to climb to 32.

Business confidence within Japan continues to worsen amidst trade war tensions sapping economic activity from the Pacific-Asia region, and the tradewar  fallout is expected to intensify in the coming months.

“The business situation is not so good due to the U.S.-China trade friction and the rising trend in fuel prices caused by the strains in the Middle East,” a manager of a chemicals maker wrote in the survey.  “Capital expenditure is being delayed due to uncertainty surrounding the global economy due to trade tensions,” wrote a manager at a machinery maker. – Reuter’s Tankan Survey