Japon Reuters Tankan Index

Japan's manufacturing sentiment took a sharp downturn in December 2024, with the Reuters Tankan index falling to -1, down from +5 in November. This marks the first negative reading in ten months, reflecting growing concerns over US protectionist policies and the struggling Chinese economy. Business confidence deteriorated across a broad range of manufacturing sectors, with pessimism significantly outweighing optimism, particularly among electronics, machinery, steel, and nonferrous metal manufacturers. Several respondents expressed worry over the potential impact of new, hefty tariffs proposed by Trump, fearing that these measures could disrupt global trade. One respondent noted, "We are seeing many investment projects delayed as a 'wait-and-see' approach has taken hold since Trump's election victory." Another cited weak sales in China, where a combination of a prolonged property crisis, high local-government debt, and sluggish consumption continues to strain the economy.