Japanese Business Sentiment in East Asia Declined in February: JETRO Monthly Survey.

Tokyo, Japan, Feb 28, 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 slightly in February.

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 3.1 points over the previous month in February.

Individual indices fell in all surveyed locations--with the exception of

Malaysia and the Philippines--as countries struggled with rising interest

rates and inflation, as well as weakening domestic demand. The index for

Indonesia recorded the highest drop in the region, slipping a dramatic 21.3

points and reaching its lowest level since the survey began in June 2001,

as the country continues to face high interest rates and inflation (in part

due to price rises for public utilities).

Overall forward business sentiment for the ASEAN region improved 0.9 points

in February, with sentiment picking up in Thailand and Indonesia: the index

for Indonesia, however, remained at a low level in this month's survey.

Overall current business sentiment for China and North Asia fell 2.6 points

over the previous month in February, owing to depressed sentiment among

Japanese firms in Hong Kong's non-manufacturing sector (including

transportation and communication). While overall sentiment among Japanese

firms in mainland China has been on a gradual rise since the end of 2005,

current sentiment leveled off in February. Sentiment among companies in the

transport equipment sector, however, picked up in this month's survey, in

the wake of buoyant domestic demand. Although the index for the Republic of

Korea (ROK) declined from its record high achieved in last month's survey,

Japanese firms operating in the country posted strong business confidence

for the sixth straight month, as the economy remained vibrant in February.

Overall forward business sentiment for China and North Asia improved 3.4

points in February, with the overall index for mainland China gaining 8.7

points.

A total of 729 replies were received in ASEAN countries (115 in Indonesia,

117 in Malaysia, 205 in the Philippines, 207 in Singapore and 85 in

Thailand),

253 in China (59 in the North, 86 in the Northeast, 67 in the East and 41

in the South); 147 in Hong Kong; 38 in the ROK and 118 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

Contact:

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

China and North Asia region
Minoru Arahata/ Shuji Sato
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.