© Archyde.com / MAKI SHIRAKI
The universal powertrain mounting system from Nissan Motor Co., Ltd., in Kawachi-gun
By Daniel Leussink and Leika Kihara
TOKYO, Jan 12 (Archyde.com) – Japanese manufacturers were less positive about their business conditions in January, according to a poll on Wednesday, despite central bank governor Haruhiko Kuroda underlining that the economy is in a slowdown. recovery paths accompanied by rising inflation.
Coupled with the possible impact of an increase in COVID-19 cases led by the omicron variant, companies have complained about rising energy and raw material costs that were reducing profits, the Archyde.com survey showed. Tankan.
The survey highlights the dilemma Japan faces as a country that relies heavily on imports of fuel and food, making its economy vulnerable to the kind of cost-driven inflation that is taking place.
Although rising inflation is a welcome development for the Bank of Japan’s effort to reach its 2% price target, there is a risk that rising cost of living will slow consumption and discourage companies from raising prices. prices, causing Japan to slide back into deflation.
“The Japanese economy is recovering as a trend, although it remains in a serious state due to the impact of the coronavirus pandemic,” Kuroda said.
Some sources have told Archyde.com that the Bank of Japan is expected to slightly raise its inflation forecast for the fiscal year starting in April on rising energy costs, although the new forecast will remain below its target of two%.
(Reporting by Daniel Leussink and Leika Kihara; edited by Chang-Ran Kim and Jacqueline Wong; translated by Flora Gómez)