REUTERS TANKAN: Robust semiconductor demand kept Japanese manufacturing
confidence relatively upbeat in July, with the manufacturing business conditions
index steady at 13. Non-manufacturing confidence fell to 25 from 32 as Middle
East tensions, a weak yen and rising interest rates raised costs. Manufacturers
reported a semiconductor market recovery — including memory-related demand — and
rapidly expanding orders for chip applications and AI-server products;
electronic component orders broadly increased. A precision machinery firm said
order volumes and values are at unprecedented levels and flagged capacity
constraints. Services firms said Middle East tensions show early signs of easing
but the situation remains unsettled. Looking ahead, manufacturers expect
sentiment to stay stable and the October manufacturing index to nudge to 14,
while non-manufacturing is forecast to remain at 25 as firms assess geopolitical
and supply-chain risks.
