Japanese manufacturers maintained relatively upbeat sentiment in July, driven by sustained demand for semiconductors, according to a report by Channel NewsAsia.
The resilience in the manufacturing sector stands in contrast to the broader economy, where confidence among non-manufacturers declined amid rising costs and external pressures.
The divergence highlights the continued strength of the global chip cycle, which remains a key support for Japanese industrial output.
While factories benefit from robust order books, the services sector is grappling with a weak yen and escalating geopolitical tensions, particularly stemming from the conflict in the Middle East.
These factors are weighing on business confidence outside the manufacturing base.
This split in sentiment underscores the uneven recovery across Japan's economic sectors.