The headquarters of Bank of Japan is seen in Tokyo on Jan 23, 2024. (AP)

TOKYO, Oct 1, (AP): Sentiment among Japan’s large manufacturers improved for a second straight quarter, according to a closely watched Bank of Japan survey, making a rate hike by its central bank more likely. The quarterly survey, called the “tankan,” showed the outlook among major manufacturers, the key so-called diffusion index, rose 1 point to plus 14 from the findings in June.

The survey is an indicator of companies foreseeing good conditions minus those feeling pessimistic. The tankan for large manufacturers was plus 12 in March, marking the first drop in a year. Sentiment among large non-manufacturers was unchanged at plus 34, according to the latest tankan. The relative optimism in the latest tankan reflects some relief over an agreement on tariffs with the US, reached in July.

The deal with the administration of President Donald Trump imposes a 15% tariff on most goods exported to the US. Some goods face higher tariffs. Initially, the US imposed a 25% tariff on auto imports, so the latest deal is an improvement for Japanese automakers. It also increases certainty over US policy, at least for now.

However the higher tariffs imposed on exports to the world’s biggest market are still squeezing profits, wages, investment and spending for many industries. Kei Fujimoto, senior economist at SuMi Trust, said that despite the concerns about the tariffs’ impact on Japanese corporate earnings, the damage so far has been relatively limited. Inbound tourism is also helping.

“We do not believe inbound-related demand from tourists has peaked. The number of tourists visiting Japan continues to show an upward trend,” he said. The tankan findings could influence an upcoming decision by the Bank of Japan on interest rates. The BOJ has kept rates near zero for years to help stimulate consumer spending and business investment and counter weak demand that led to deflation.

But prices have risen above the central bank’s target range of about 2%. The tankan shows the average inflation outlook for one year ahead was unchanged at 2.4%. Analysts expect the Bank of Japan to raise its benchmark rate soon, but it’s unclear if it will do so at the next meeting later this month, or later. The central bank raised its benchmark rate to 0.5% from 0.1% earlier this year.

Mexican President Claudia Sheinbaum attends her morning press conference at the National Palace in Mexico City on April 2. (AP)

MEXICO CITY, Sept 30, (Xinhua): Mexican President Claudia Sheinbaum on Monday said she hoped the United States would show “consideration” toward Mexico following the US decision to impose new tariffs on heavy vehicle imports. “We are already in talks, hoping there will be consideration toward Mexico,” Sheinbaum said during her daily press conference, adding the tariffs could be problematic for both countries.

US President Donald Trump on Thursday announced a slew of new tariffs, including a 25-percent tariff on imported heavy vehicles starting Oct 1, as part of his policy to strengthen the domestic industry. Sheinbaum noted that under the United States-Mexico-Canada Agreement on free trade, Mexico’s exports have grown in sectors not subject to tariffs, particularly those excluding finished vehicles, steel or copper, benefiting from the accord’s “zero-tariff” scheme. “Trade ties with the United States continue to be very important and a very significant competitive advantage for Mexico,” said Sheinbaum. 

A man looks at an electronic stock board showing Japan’s Nikkei 225 index at a securities firm on Sept 30, in Tokyo. (AP)

TOKYO, Sept 30, (AP): Asian shares were mixed in narrow trading Tuesday as investors braced for a possible US government shutdown. Japan’s benchmark Nikkei 225 declined nearly 0.3% to finish at 44,932.63. China reported lackluster data on factory activity for September that reflect persistent weakness in the world’s second largest economy as trade tensions with the US weigh on exports. Hong Kong’s Hang Seng gained 0.3% to 26,694.10.

The Shanghai Composite index added 0.5% to 3,882.07. Elsewhere in Asia, Australia’s S&P/ASX 200 edged down 0.2% to 8,847.00. South Korea’s Kospi slipped nearly 0.1% to 3,428.28. The US federal government is nearing a budget deadline that could result in its shutdown. Past shutdowns have been shortlived and had minimal impact on markets and the economy.

But if the stalemate between Democratic and Republican lawmakers persists, that could delay the collection and release of economic data, such as on jobs and inflation. This shutdown may also be different because the White House may push for large-scale firings of federal workers. “It feels as though the market has already flogged the government shutdown story from every conceivable angle, the way traders circle a fading theme until there’s nothing left but dust.

Yet with the clock ticking down to less than 24 hours before the doors are slated to close in Washington, the narrative refuses to die,” said Stephen Innes. managing partner at SPI Asset Management. On Monday, Wall Street finished higher as technology stocks recovered some of their losses from late last week. The S&P 500 added 0.3% to 6,661.21 and the Dow Jones Industrial Average edged 0.1% higher, to 46,316.07.

The Nasdaq composite climbed 0.5% to 22,591.15. Big Tech stocks ticked higher. Amazon added 1.1% following its 5.1% drop last week, and Microsoft rose 0.6% to recover some of its 1.2% decline. They were two of the strongest forces lifting the S&P 500 because they’re two of Wall Street’s most valuable stocks. A report is due Friday about how many jobs US employers created and cut last month. The hope is that it will be balanced enough to keep the Federal Reserve on track to continue cutting interest rates.