42% Of Major Japanese Firms See Economy Sputtering

Around 42 percent of major companies in Japan expect the country's economy to slow down over the next 12 months, up from just 5 percent one year ago, as they struggle to cope with surging commodity costs and the yen's weakness, a Kyodo News survey showed.

Photo Insert: The survey of 114 companies, including Toyota Motor Corp. and SoftBank Group Corp., found that Japanese blue chips are becoming increasingly pessimistic about the country's economic outlook.

The survey of 114 companies, including Toyota Motor Corp. and SoftBank Group Corp., found that Japanese blue chips are becoming increasingly pessimistic about the country's economic outlook, up from 12 percent at the beginning of the year.

Meanwhile, those that believe Japan's economy will expand dropped to 55 percent from 90 percent one year ago, and 84 percent earlier this year, as concerns weighed on hopes for a gradual recovery from the COVID-19 pandemic.

With multiple answers allowed, 83 percent that expect the economy to slow down cited adverse effects of higher commodity prices, followed by 58 percent predicting sluggish growth or a decline in consumer spending.

Some 56 percent said the yen's weakness against the US dollar and other major currencies would negatively impact the economy.

Stronger global demand has pushed crude oil and commodity prices up to historic highs as countries attempt to restart their economies, while Russia's invasion of Ukraine has further aggravated supply chain constraints.

Furthermore, the Japanese currency has been in a freefall against the US dollar in recent months, hitting a fresh 24-year high last month in the 139 zone amid contrasting approaches in monetary policy between Japan and the United States.

WEEKLY FEATURE : MVP Group Keeps Lights On During Pandemic