The business survey index of large manufacturing firms in Japan decreased 9.9% in the second quarter of 2022, deteriorating further after posting a 7.6% decline in the previous quarter, as high input costs continued to squeeze corporate margins. Latest data showed producer prices in the country jumped 9.1% in May from a year ago, slowing from the previous month but remaining near record highs as the Ukraine crisis and a weak yen pushed up the cost of energy and raw materials. Japan’s heavy reliance on imports for fuel and other commodities makes its economy vulnerable to global supply issues and inflationary shocks. The business survey index measures the percentage of firms that expect the business environment to improve from the previous quarter minus the percentage that expect it to worsen.
