According to a report by the Kyodo News Agency on July 1, the Bank of Japan’s June short-term economic observation survey (short view) of companies showed that the large-scale manufacturing company’s business judgment index (DI) was negative 34, compared with the previous time in March. The survey fell 26 points. The index fell to a low since June 2009 (negative 48) shortly after the Lehman crisis. A wide range of industries have been hit by the new coronavirus epidemic, and the index has deteriorated for six consecutive quarters.
Accommodation and catering services in large-scale non-manufacturing industries have deteriorated significantly, with DI falling 25 points to minus 17. This is the first negative value since June 2011 after the Great East Japan Earthquake, and the decline has hit a record high. The manufacturing industry predicts that the DI of the prosperity situation after three months will be negative 27, which is expected to improve, but the worry about the "second wave" of the epidemic cannot be eliminated, and there is still strong uncertainty in the prospects. The Japanese economy is at a fork in the road to whether it can get rid of the worst period and return to the recovery track.
DI is the value obtained by subtracting the proportion of companies answering “bad” from the proportion of companies answering “good”. The survey was conducted from May 28 to June 30, and about 9,500 companies across Japan were targeted, and almost all companies gave answers.
Leading to the Japanese basic industry automobile, the large-scale manufacturing enterprise DI has deteriorated in a wide range of industries. The automotive industry fell 55 points to minus 72, and steel fell 43 points to minus 58.
In the manufacturing industry, the lodging and catering services industry, which was affected by the requirement to avoid going out and shut down, fell 32 points to minus 91, and entertainment-oriented service industries such as personal-oriented services fell 64 points to minus 70, both falling to the lowest level in history. On the other hand, the retail industry with "dwelling consumption" rose by 9 points to 2, and there were also industries with strong performance. The overall DI did not deteriorate as Lehman period did.
The industry-wide DI of Japanese SMEs fell 26 points to minus 33.
In terms of price expectations for enterprises of all sizes in the industry, consumer prices are expected to increase by an average of 0.3% over the previous year, a decrease of 0.2 percentage points from the March survey.
