Japanese manufacturers turned more cautious in June, with sentiment dipping amid concerns over U.S. tariffs and sluggish Chinese demand, the latest Reuters Tankan survey shows.

  • The manufacturers’ index fell to +6 in June from +8 in May, with expectations it will drop further to +2 in the next three months.

  • Sentiment among non-manufacturers held steady at +30 in June but is forecast to ease to +24 by September.

Firms cited uncertainty over U.S. trade policy, especially tariffs on autos and parts, as a key headwind. One machinery firm noted clients were holding off on capex, while a chemical producer said a client had moved production to the U.S. to sidestep tariffs. Others pointed to China’s weak demand and rare earth export curbs as additional pressure.

Service sector firms remained more upbeat, supported by robust IT spending and strong inbound tourism, though rising labour costs and staff shortages were flagged as concerns.

more to come

Source: Forex Live