Japan Factory Mood Edges Up While Service Sector Slips

The Reuters Tankan poll shows Japanese manufacturing sentiment rose slightly to plus 8 in May as commodity industries recovered from previous geopolitical shocks. However, the service sector index fell to plus 29 as supply chain constraints and rising costs continue to weigh on business outlooks.

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Japan manufacturers saw business sentiment inch up to plus 8 in May as commodity-linked sectors recovered from previous geopolitical shocks. The Reuters Tankan index rose 1 point from April but remains 10 points below the four-year high recorded in March. For investors, the data signals a lukewarm recovery hampered by persistent supply chain bottlenecks and rising input costs.

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