Confidence among Japan’s small and medium-sized enterprises weakened for the second straight month in January to the lowest level in seven months, survey figures released by the Shoko Chukin Bank showed Wednesday.
The small business confidence index dropped to 47.2 in January from 48.3 in December. In November, the reading was 49.9.
The latest score was the weakest since June 2015, when it marked 46.9.
The index measuring confidence in the manufacturing sector dropped by 0.5 percentage points to 46.1 in January.
Similarly, the morale for the non-manufacturing sector also worsened at the start of the year, with the index falling to 48.1 from 49.6 in the prior month.
The overall business confidence index for February is expect to climb to 48.3. The survey respondents forecast the manufacturing confidence to rise to 47.1 and the non-manufacturing confidence to improve to 49.2.
The drop in small business confidence in January partly reflects seasonal patterns, and the bigger picture is that firms remain fairly upbeat, Marcel Thieliant, an economist at Capital Economics, said.
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