A recent Nikkei survey has revealed a decline in optimism among Japanese corporate executives. The survey found that only 50% of respondents believed the economy was expanding or slightly expanding, down from the previous quarter’s 72%. This is the lowest percentage since the March 2022 survey, when only 13.1% expressed optimism. Moreover, 45% of respondents now believe the economy will remain stable, compared to just 20% in the previous survey.
The shift in mood among Japanese company chiefs can be attributed to several reasons. Lump-sum spending was cited by 80.3% of respondents as a contributing factor, while stagnation in China was mentioned by 40.9%. Additionally, ongoing labor shortages were pointed out as a significant obstacle to economic growth by 37.9% of respondents.
A summary of BIOJ’s March meeting also highlighted a slow rate cycle ahead, which is consistent with Nikkei survey findings. The overall tone of the survey suggests that Japanese corporate leaders are becoming increasingly cautious about their future outlook, with concerns about consumer spending, global economic conditions and labor shortages weighing heavily on their minds.