JETRO Releases Results of Monthly Survey of Japanese Businesses in East Asia.

Tokyo, Japan, June 29, 2006 - (JCN Newswire) - JETRO's monthly survey of Japanese companies and affiliates operating in 12 countries/regions of East Asia revealed that overall current sentiment for the ASEAN region remained depressed in June, with the region's index hovering in negative territory for the seventh straight month. Sentiment in Indonesia was especially low, in particular among firms in the manufacturing sector.

Overall current sentiment for China and North Asia declined slightly in June. 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 improved only slightly over the previous month in June. The region's index, which now stands at -8.0, remained in negative territory for the seventh straight month in June. By country, current indices for all locations (with the exception of Singapore) remained in negative territory in this month's survey; the Singapore index, now at 19.4, continued strong, the survey revealed.

Overall forward business sentiment for the ASEAN region improved 4.1 points in this month's survey, with sentiment picking up slightly or remaining unchanged in all locations.

Overall current business sentiment for China and North Asia declined 2.3 points over the previous month in June; the region's index now stands at 8.0. By location, the index for mainland China remained buoyant (now at 15.3), although declining 3.3 points over the previous month in June. The index for Taiwan fell 4.5 points and remained in negative territory for the third straight month in June.

Overall forward business sentiment for China and North Asia remained unchanged this month. Indices for mainland China and Hong Kong improved slightly, showing continued strong business confidence in those locations. Sentiment in Taiwan, however, was down in June, on the back of stagnant transport equipment sales in Taiwan's domestic market.

As a supplement to the regular monthly survey, JETRO included a question in the June survey regarding the impact (if any) of price and interest rate rises on current business sentiment. More than half of all respondents (56.8%) linked price rises to falling sentiment, while 33.9% blamed rising interest rates. By region, these factors were more of a concern among firms in the ASEAN region, compared to those in China and North Asia: the percentages of respondents citing negative impacts from rising prices were 61.5% in the ASEAN region and 49.5% in China and North Asia, while those singling out rising interest rates were 36.9% in ASEAN and 29.1% in China and North Asia.

A total of 720 replies were received in ASEAN countries (118 in Indonesia, 107 in Malaysia, 201 in the Philippines, 216 in Singapore and 78 in Thailand), 202 in China (47 in the North, 60 in the Northeast, 57 in the East and 38 in the South); 131 in Hong Kong; 28 in the ROK and 106 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-sized Japanese firms maximize their global export potential.

Source: JETRO

Contact:

Japan External Trade Organization (JETRO)
Public Relations Division
Phone: [phone]
Fax:  [phone]
http://www.jetro.go.jp

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