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Lockdowns in China, coupled with compounding supply chain issues and COVID-19-related uncertainties, continue to impact the sentiment of companies discussing Japan as a geography. The sentiment for production is down nearly 30% in Q2 2022* over Q1 2022 while capacity sentiment is down 8%, according to the company filing analytics database of GlobalData, a leading data and analytics company.
Rinaldo Pereira, Business Fundamentals Analyst at GlobalData, comments: “Japan is a key manufacturing hub for many companies and OEMs. The supply disruptions in China seem to be weighing on sentiment for companies discussing Japan in earnings calls transcripts and quarterly filings in Q2 2022. ‘China’ is the top keyword mentioned around Japan so far in 2022* while ‘Revenue’ and ‘Investment’ were the top keyword during the same period last year. Logistics issues continue to haunt manufacturing firms.”
Consumer company Estée Lauder is facing supply-related inflationary pressures in supply chain, which are impacting costs for its plant in Japan. Supply chain disruptions are also impacting deliveries to Japan. Opsens Inc is facing issues in component-related deliveries to Japan. Philip Morris is also seeing cost impacts in Japan, due to supply chain issues.
Pereira adds: “Travel restrictions in Japan are putting pressure on tourism companies. However, with the discussions around a likely opening of borders for foreign tourists in June, tourism companies seem to showcase a hint of optimism.”
Comcast Corp’s Universal Studios was also impacted by capacity restrictions in Japan. In 2022, airline companies such as Lufthansa and Delta Air Lines commented on pressures, with Hilton and Uber also facing challenges amid restrictions.
In contrast, BE Semiconductor Industries N.V. and Taiwan Semiconductor Manufacturing Company Ltd are looking at further investment and capacity expansion in Japan. Ericsson also sees opportunities with a high demand on capacity.
Pereira concludes: “Semiconductor manufacturers in Japan seem to be positive around demand and are looking at further investment and expansion.”