Japan’s business mood worsens as US tariff uncertainty takes toll

[TOKYO] Japan’s business sentiment worsened in April-June for the first time in five quarters, a government survey showed on Thursday, a sign uncertainty over US tariff policy was taking a toll on the country’s export-heavy economy.

An index measuring big firms’ business confidence fell to -1.9 in the current quarter, following +2.0 in January-March, Ministry of Finance data showed.

Manufacturers surveyed by the government expect recurring profit to fall 1.2 per cent in the current fiscal year ending in March 2026, bigger than a 0.6 per cent drop projected in the previous survey.

Automakers and auto parts makers expect profits to plunge 19.8 per cent in fiscal 2025, the survey showed, highlighting their concern over the expected hit from steep US tariffs.

The index indicates the ratio of companies that saw business conditions improve from the previous quarter, versus those who saw conditions worsen. A negative reading shows more firms saw conditions worsening. REUTERS