Japan’s corporate heads are increasingly pessimistic about the economy, according to a recent survey by Nikkei. In the survey, only 50% of respondents believed that the economy is “expanding” or “expanding slightly”, down from 72% in the previous quarter. This marks the lowest reading since the March 2022 poll, which had just 13.1% of respondents feeling optimistic.
Despite this decline in optimism, there was also an increase in the number of respondents who believe that the economy will remain flat. In the survey, 45% said they believe that will happen, up from 20% in the previous poll. The reasons for this shift in sentiment included factors such as flat consumer spending (80.3%), stagnation in China (40.9%), and persistent labor shortages (37.9%).
The Nikkei survey is conducted quarterly and provides insights into the sentiment of Japan’s corporate leaders. The Summary of the March BIOJ meeting also indicated a slow rate cycle ahead, further reinforcing the downward trend in optimism about the economy.
