The best Japanese manufacturer’s mood in three years after the tariff agreement – Polling Reuters

Japanese producer sentiment is the best in more than three years in September, Reuters Tankan’s polls showed, with trade uncertainty reduced after Japan reached a tariff agreement with the US in July.

Monthly polls that track the Bank of Japan quarterly business survey show that the manufacturer’s mood index increased to 13 in September from August 9, marking the third month of the highest increase and reading since August 2022.

The producer expects sentiment to slightly down to +11 in December, according to a survey of 497 main non-financial companies, in which 238 responded to the condition of anonymity between August 27 and September 5.

Six of the nine manufacturing industries surveyed saw their sub-index improved in August, including the engine industry and car transportation, which had an index soaring to 33, the highest since December 2023, from 25.

Some managers in the transportation machine sector say they have received solid orders, while some refer to domestic production stagnant in recent months given the shrinkage in exports.

US President Donald Trump last week signed an executive order forming a trade agreement with Japan, eliminating some concerns in Tokyo about the implementation of a 15% tariff decline in Japanese main export items such as cars.

Some other industrial managers expressed their diverse views, saying customer demand and lukewarm investment except for relatively bright points such as semiconductor businesses.

Textile, oil refineries and precision engine sectors have confidence dipped in August. “The order has been partially slow because of Trump’s tariff,” said a precision machine maker manager.

In the future, producers are less optimistic, also because the domestic economy is weak, with respondents citing the effects of persistent inflation on consumer expenses and rising material and labor costs.

The service sector index recovered to 27 in September, after reaching the lowest level nine months in 24 in August, the poll showed. Non-manufacturing companies do not see changes in their views in December at the age of 27.

Four of six service industries, including real estate, retail and transportation, have sub-indexes, while wholesalers and IT companies report more dim business conditions in August.

Apart from the tension of global trade, the Japanese economy has been supported by relatively tough consumption at home. The fourth largest economy in the world is expanded with 2.2% annual in April-June, revised gross domestic product data shows on Monday.
Source: Reuters

US 30 years of slide hypotek level to the lowest level of 11 months, MBA data shows
Interest rates on the most popular US home loans fell most in the maximum of six months last week after a weak job report made the Treasury bond benchmark producing to anticipate the deduction of the federal reserve level at its meeting next week.

The Hypotek Banker Association on Wednesday said the contract rate in 30 years, a mortgage with a fixed interest rate dropped 15 basis points in the week ended September 5 to 6.49%, the lowest since last October.

With the latest decline, the tariff has dropped 60 basis points since mid -January and has triggered encouragement in the volume of applications both for loans to buy homes and to re -finance existing loans, data shows.

The MBA weekly application index rose 9.2% last week to 297.7, the highest in more than three years. This increase was led by an increase of 12.2% in the index tracking application to finance the hypotek to the highest in almost one year. The refinancing application contributed almost half of all applications last week, said MBA.

Index tracking loans for property purchases rose 6.6% to the highest in about two months.

The housing market has been in a protracted decline due to a high combination of loan costs, increasing property prices and limited home supply in the market, but the latest data shows the worst may have passed for this sector. The existing house supply to be sold continues to move higher, the annual price increase has begun to level up, and interest rates now seem ready to make it easier because Fed seems ready to shift the gear to cut interest rates next week.

The central bank has left its benchmark level stable since last December at 4.25%-to 4.50% due to concern that President Donald Trump’s aggressive tariff will trigger inflation improvement.

But while inflation has increased higher, officials in recent weeks have shown more concern about the weakening of the job market.

Monthly work reports respectively have failed in economic estimates and are accompanied by a large revision down to the estimated growth of previous work. In addition, data on Tuesday shows that nearly one million less work was created in 12 months to March from previously reported.

The results in 10 years Treasury recorded US10Y, which the bank used as a benchmark to determine the level of mortgage, had fallen sharply in responding to the softening of the work market, and the home loan rates had followed.

Trump has demanded a slaughtering interest rates since he returned to the White House in January and has continued to face endless pressure on The Fed, regularly underestimated the Chairman of the Central Bank Jerome Powell and recently moved to overthrow Governor Lisa Cook.

The Futures Futures Market is positioned in general and is large for a reduction in 25 basis points at the end of September 16-17 Fed, with a futures price reflecting the probability of around 7% of the 50-Basis point cutting.
Source: Reuters