TOKYO — Major Japanese companies are increasingly pessimistic about the economy due to higher costs and a weaker yen, according to a survey by Kyodo News.
The survey of 117 companies found just over half, or 56%, expect the economy to grow this year. That was down sharply from 84% a year earlier, the survey released on Monday said.
The percentage of companies forecasting growth was the second-lowest in 10 years in the annual survey, and companies also expressed concern about a slowdown in the United States and China in 2023.
The war in Ukraine has pushed prices of oil and other raw materials higher, and the yen weakened against the US dollar, raising risks for the world’s third-largest economy.
The bleak outlook also reflects concerns about a possible global recession as central banks in the US and other major economies raise interest rates to combat inflation.
The dollar rose to about 150 yen at its peak last year from 115 yen at the start of the year. On Tuesday, it was trading at around 130 yen.
Just 3% of companies surveyed said a weaker yen was a positive for them, with about a third saying it was a problem because it increased energy and manufacturing input costs. , affecting their profits.
Japan’s economy shrank at an annual rate of 0.8 percent in the July-September period as pandemic prevention measures were eased at the end of summer, allowing business and tourism activities to continue. The normal schedule is resumed. Exports increased 2.1% year-on-year. Growth for the last financial year, which ended in March, was 2.5%.
Toyota Motor Corp. is one of those companies expecting a relatively good year. Like other major export producers, it benefits from a cheaper yen when it comes to repatriating profits earned abroad.
According to a survey conducted from late November to mid-December, energy, telecommunications and technology company SoftBank Group Corp. The situation is also expected to improve in the coming months.
Consumer spending is recovering as Japan lifts restrictions on business activity to combat the COVID-19 outbreak, even as the number of infections has skyrocketed in recent weeks. Most companies that forecast a positive outlook for 2023 see that as the main reason for optimism.
About a third of companies surveyed said they expect no major changes this year, while seven expect a moderate contraction.
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Yuri Kageyama is on Twitter https://twitter.com/yurikageyama
