FX.co ★ Japan Manufacturers’ Mood Hits 8-Month High, Outlook Worsens

In April 2025, Japan's manufacturing sentiment, as measured by the Reuters Tankan index, surged to +9 from -1 in March, reaching its highest point since August of the previous year. While the current sentiment appears positive, concerns loom over the upcoming three months due to growing apprehensions about U.S. trade policies. The index is expected to decline back to zero, with Japan preparing for a 10% tariff on its exports to the U.S., alongside a significant 25% tariff on automobiles. Industries that are heavily reliant on exports, notably automotive and machinery sectors, are voicing concerns over decreasing orders and heightened client hesitancy. The primary issue remains the uncertainty surrounding U.S. tariffs, although some companies have also highlighted weakened demand from China and the competitive threat posed by lower-cost Chinese goods affecting domestic sales.