BOJ Survey Expected To Report Weak Manufacturing In Its June Survey

According to the most recent predictions of 16 think tanks, the Bank of Japan's "Tankan" poll for June is predicted to reveal a decline in manufacturing confidence for the second consecutive quarter, reflecting rising material costs, Jiji Press reported.

Photo Insert: The June survey's price-related data is being closely scrutinized, as the yen's fast depreciation has driven up import prices.

In contrast, the June poll, which is due out on Friday, is expected to indicate an increase in nonmanufacturing optimism as the services sector sees earnings rise due to a drop in new COVID-19 infections.

The headline diffusion index (DI) for business sentiment among major manufacturers is expected to dip 1 point from the March survey to 13.

Daiwa Institute of Research Ltd. noted the worsening external environment for manufacturers, such as increasing commodity costs in the aftermath of Russia's invasion of Ukraine, as well as component shortages in the aftermath of the COVID-19 lockdown in Shanghai.

Meanwhile, the DI for major non-manufacturers is expected to jump 6 points to 15, following the government's full withdrawal of coronavirus pre-emergency measures in March, which is said to have boosted the mood in the hospitality industry, particularly restaurants and hotels.

The June survey's price-related data is being closely scrutinized, as the yen's fast depreciation has driven up import prices.

According to BNP Paribas Securities (Japan) Ltd., the quarterly poll will show that enterprises, especially non-manufacturers, are increasingly passing on greater expenses in their prices. DI is expected to improve among both large firms and non-manufacturers.

However, NLI Research Institute stated that the outlook DI is unlikely to register a considerable increase due to continued concerns about rising or lingering material prices.

WEEKLY FEATURE : MVP Group Keeps Lights On During Pandemic