Japan’s corporate leaders are becoming increasingly pessimistic about the economy, according to a recent survey by Nikkei. The survey found that only 50% of respondents believe the economy is “expanding” or “expanding slightly,” a sharp decline from the previous quarter’s survey where 72% expressed positivity. This 50% reading is the lowest since a poll in March 2022, which had only 13.1% of respondents feeling optimistic. Additionally, 45% of respondents now feel that the economy will remain flat, compared to just 20% in the previous survey.
The Nikkei survey identified several reasons for this shift in sentiment among Japan’s corporate heads. The majority of respondents, 80.3%, blamed flat consumer spending for the lack of economic growth. Stagnation in China was cited by 40.9% of respondents, while persistent labor shortages were pointed to by 37.9% as contributing factors.
The March BIOJ meeting also indicated a slow rate cycle ahead, which aligns with the findings of the Nikkei survey. The overall tone of the survey suggests a growing sense of caution among Japan’s corporate leaders, with concerns about consumer spending, global economic conditions, and labor shortages weighing on their outlook for the future.