Japanese officials at a recent MITI dialogue.

KUALA LUMPUR: Business sentiment of Japanese companies in Malaysia has recovered for the first time in three years and is likely to improve further into 2018, says the Japanese Chamber of Commerce of Malaysia (JACTIM).

In a recently conducted business survey of 192 companies which represent 35 per cent of its total members, they acknowledged that the impact of foreign exchange fluctuations on their businesses is diminishing.

Leading indicators like the diffusion index for the second half of 2017 leaped to 2.1 points from minus 8.8 points.

“The impact of forex fluctuations on business is diminishing and business sentiment of Japanese business in Malaysia will continue to trend upwards modestly,” said Akira Kajita who heads JACTIM’s research committee, during a media briefing.

JACTIM, which has 546 members, is the main voice of Japanese businesses in Malaysia.

Kajita, who is also the managing director of Japan External Trade Organisation (JETRO), however noted that manpower shortage continued to affect the business operations.

Most of them were impacted by the restriction on hiring foreign workers, he added.

Earlier this month JACTIM, JETRO and the Japanese ambassador Dr Makio Miyazawa had a dialogue session with International Trade and Industry Minister Datuk Seri Mustapa Mohamed.

The business survey is conducted twice a year, and aims to serve as a barometer for the business sentiment and outlook of Japanese businesses in Malaysia.

In a salary survey, it found that the wages increased by 4.9 per cent for the management level while those working at the operation site enjoyed a 4.5 per cent increase.

The rate was lower than 2016 and it is projected to remain the same in 2018, Kajita added.

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