Japan's business sentiment hit the worst level in over two years, according to a survey conducted by the Bank of Japan. The survey showed that the mood in the manufacturing sector soured in January-March due to slowing global growth, rising raw material and fuel costs, and slumping chip demand. The headline index measuring big manufacturers’ sentiment fell to +1 in March from +7 in December, the worst level since December 2020. However, the service sector mood recovered due to easing border controls and an end to Covid-19 curbs, raising hopes for a rebound in tourism and consumption. Big non-manufacturers’ index rose for a fourth quarter to +20 from +19 in December. The central bank will scrutinise the survey data to produce fresh quarterly growth and inflation estimates at its next meeting.
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