Business confidence in Japan rises to 24 points, 6th consecutive increase

WHAT HAPPENED

Confidence among large Japanese manufacturers rose to 24 points in September, marking its sixth consecutive quarterly advance. The boost came from chips for artificial intelligence. In services, it dropped from 37 to 35 points.

WHY IT MATTERS

Companies expect prices to rise by 2.6% per year over the next three years: something that costs $100 would be about $102.60 in a year. As inflation remains above the 2% target, the Bank of Japan may raise its rate; this makes credit more expensive and could strengthen the yen.

AND FOR YOUR PORTFOLIO

For a long-term portfolio, Japan shows two opposing forces: the demand for chips supports its factories, while a higher rate may pressure exporters of cars and electronics. A strong yen could also impact bonds and markets outside of Japan.