Japan manufacturers’ sentiment rises to 4-month high in December – Reuters Tankan Survey

As per the latest report from Reuters Tankan Survey, “Japanese manufacturers’ business confidence index rose to a four-month high in December as supply constraints began to ease.”

The sentiment poll adds, “offering policymakers some hope the economy was headed for a moderate recovery.”

Key quotes

The monthly poll, which tracks the Bank of Japan’s (BOJ) closely watched Tankan quarterly survey next due on Dec. 13, showed the manufacturers’ sentiment index improved to 22 in December, following three straight months of declines to 13 in November. That compared with a reading of 18 in the BOJ’s latest October survey.

Sentiment among non-manufacturers also improved in December, suggesting consumption was gradually recovering after the lifting of social curbs by end-September to contain the spread of coronavirus cases.

On outlook, both manufacturers and services companies were more optimistic, with the three-month forward index among manufacturers rising to 26 from 19 and for services companies to 21 from 15.

FX reaction

USD/JPY retreats from weekly top to 113.55 during the pre-Tokyo open trading amid Wednesday’s Asian session. The yen pair previously cheered the risk-on mood but the firmer US dollar challenges buyers of late.

Read: USD/JPY bears are moving in as the US dollar grows weary