JETRO Releases Results of Its Latest Survey of Japanese Businesses in East Asia.

Tokyo, Japan, May 30, 2006 - (JCN Newswire) - JETRO's monthly survey of Japanese companies and affiliates operating in 12 countries/regions of East Asia revealed that overall current business sentiment declined in both the ASEAN region and Northeast Asia in May. Current sentiment was down in all ASEAN locations (with the exception of Singapore); the index for Thailand fell dramatically as political instability continued to grip the country. Sentiment among firms in mainland China, however, continued on the gradual rise that started at the end of 2005.

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 declined 6.1 points over the previous month in May, with the index remaining in negative territory for the sixth straight month. The index for Singapore rose 6.9 points, on the heels of the country's expanded exports of electric/electronics equipment and booming construction and real estate sectors. Sentiment in the remaining four ASEAN countries, however, was down, with indices reaching into negative territory in all four countries in May. Depressed sentiment among Japanese firms in the region reflects their growing concern over falling domestic demand (stemming from price and interest rate rises). Worsened sentiment in Thailand and Indonesia reflects the current political uncertainty in these countries.

Overall forward business sentiment for the ASEAN region improved 4.9 points in May, with sentiment improving slightly or remaining unchanged in every surveyed location. Indices remained in negative territory in every country except Singapore; the index for Indonesia stood out as exceptionally low (compared to other countries) in the May survey.

Overall current business sentiment declined 2.1 points over the previous month in China and North Asia in May; the region's index, however, remained buoyant (now at over 10). Japanese firms in mainland China continued to display strong confidence in May, helping push the region's index to a high 18.6. The index for the Republic of Korea (ROK) slipped 22.5 points, against the backdrop of a stronger won, while Taiwan's index slipped 2.4 points, mainly owing to stagnant transport equipment sales in the Taiwanese domestic market, the survey revealed.

Overall forward business sentiment for China and North Asia improved 2.8 points in May. Business confidence in mainland China and Hong Kong continued to rise, while sentiment in ROK and Taiwan remained depressed in May.

A total of 682 replies were received in ASEAN countries (112 in Indonesia, 102 in Malaysia, 207 in the Philippines, 189 in Singapore and 72 in Thailand), 215 in China (48 in the North, 67 in the Northeast, 61 in the East and 39 in the South); 135 in Hong Kong; 33 in the ROK and 104 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, but not by industry, and no breakdown is given for Northeast China, due to the small numbers of companies surveyed in these areas.

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," "same" or "worse" than a year earlier. 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 size Japanese firms maximize their global export potential.

Source: JETRO

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http://www.jetro.go.jp

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