Japan business mood turns negative amid US tariff fears

Japan’s business sentiment deteriorated in the April-June quarter for the first time in over a year, with growing concerns over US tariffs weighing on its export-reliant economy, government data showed. The Ministry of Finance’s index for large firms’ business confidence fell to -1.9 from +2.0 in the previous quarter, signaling more companies reported worsening conditions. Manufacturers now expect recurring profits to decline 1.2% for the fiscal year ending March 2026, a steeper drop than the 0.6% forecast in the prior survey. The outlook is especially bleak for automakers and auto parts suppliers, who anticipate a 19.8% plunge in profits amid looming tariff hikes. The index measures the net balance of firms reporting better versus worse business conditions.