JETRO Monthly Survey Finds Japanese Business Sentiment in East Asia Continues Mixed in October.

Tokyo, Japan, Oct 30, 2006 - (JCN Newswire) - JETRO's monthly survey of Japanese companies and affiliates operating in 12 countries/regions of East Asia revealed that sentiment in October remained subdued in the ASEAN region while continuing strong in mainland China.

JETRO polls the companies to measure year-on-year changes, expressed as diffusion indices, in their business outlooks for the current month and the next two to three months going forward.

Overall current business sentiment for the five ASEAN countries included in the survey improved 1.7 points in October. Individual indices improved for all countries over the previous month with the exceptions of Thailand and Malaysia. Depressed sentiment in Thailand reflected uncertainty regarding business prospects caused by political changes in September; in Malaysia, the electric/electronics equipment sector suffered weak performance. The index for the Thai transportation equipment sector fell to negative territory for the first time in five years. In contrast, the index for the transportation equipment sector in Indonesia improved 48.9 points, owing to  an expected recovery in domestic demand for transport equipment, including motorcycles.

Overall forward business sentiment for the ASEAN region declined 2.5 points in this month's survey. The index for Indonesia, which had been on a downward trend since November 2005, improved a dramatic 20.8 points in October due to an expected recovery in domestic demand for transport equipment, and improving construction and real estate sectors.

Overall current business sentiment for China and North Asia continued solid, improving 1.7 points over the previous month in October (now at 10). By location, the index for Taiwan fell 8.1 points (now at -24.0). Indices for all Taiwanese sectors fell, with the greatest decline found in the transport equipment sector. At -15.8, the Korean index remained in negative territory, weighed down by the country's stagnant economy. The index for South China, where the index remained in negative territory in the previous month, improved 2.8 points (now at 13.9). Overall current sentiment for mainland China improved 7.5 points, and remains buoyant (now at 26.6).

Overall forward business sentiment for China and North Asia declined 5.7 points in this month's survey. Forward indices for mainland China continued strong, while that of Taiwan (at -16.0) and the ROK (at -13.2) remained stagnant.

A total of 725 replies were received in ASEAN countries (130 in Indonesia, 97 in Malaysia, 180 in the Philippines, 208 in Singapore and 110 in Thailand); 203 in China (40 in the North, 48 in the Northeast, 79 in the East and 36 in the South); 130 in Hong Kong; 38 in the ROK and 100 in Taiwan.

JETRO, in cooperation with Japan's Ministry of Economy, Trade and Industry , has been conducting the survey in the first week of every month since June 2001 in the five major ASEAN countries, since June 2002 in South China, Hong Kong and Taiwan, since July 2002 in North and East China, and since October 2002 in the ROK and Northeast China. Results for the ROK are broken down into manufacturing and non-manufacturing only, not by industry, and no breakdown is given for Northeast China due to the small numbers of companies surveyed in the region.

The aim of the survey is to provide up-to-date information on business conditions in the Asian economy to help companies develop more effective business strategies. Firms are asked to compare earnings prospects, supply and demand, inventory, sales prices and accounts receivable with the same period one year earlier. The current month and the following two to three months are evaluated separately in each question. Replies are limited to "better," "the same" or "worse", in comparison to the previous year. The diffusion index  is the difference between the ratio of positive ("better") and negative ("worse") responses.

About JETRO

The Japan External Trade Organization , or JETRO, is a government-related organization that works to promote mutual trade and investment between Japan and the rest of the world. Originally established in 1958 to promote Japanese exports abroad, JETRO's core focus in the 21st century has shifted toward promoting foreign direct investment into Japan and helping small- to medium-sized Japanese firms maximize their global export potential.

Source: JETRO

Contact:

ASEAN region
Mr. Ryoichi Ito or Mr. Shigeru Kuwabara
Asia and Oceania Division
Overseas Research Dept.
Phone: [phone]

China and North Asia region
Mr. Minoru Arahata or Mr. Kenji Shimizu
China and North Asia Division
Overseas Research Dept.
Phone: [phone]

Copyright [c] 2006 JCN Newswire. All rights reserved. A division of Japan Corporate News Network K.K.