Japan's manufacturing sentiment dips on tariffs, weak China demand

Japan's manufacturing sentiment sharply declined in December 2024, with the Reuters Tankan index slipping to -1 from +5 in November, marking the first negative reading in ten months.

Japan's manufacturing sentiment dips on tariffs, weak China demand

This decline highlights growing concerns over U.S. protectionist policies and a faltering Chinese economy. Confidence weakened across various manufacturing sectors, with pessimism dominating among electronics, machinery, steel, and nonferrous metal producers. Many respondents pointed to the potential disruption from proposed tariffs by U.S. President Trump, with one noting, *“Investment projects are being delayed as businesses adopt a wait-and-see approach following Trump’s election.”*

Weak China sales hit amid property crisis and tepid consumption

Others cited weak sales in China, where challenges like a prolonged property crisis, high local government debt, and tepid consumption weigh on economic activity.