TOKYO (Reuters). Japan’s biggest manufacturers were less optimistic than usual in the first quarter of 2018, as they struggled to cope with rising energy prices and supply disruptions after Russia’s war in Ukraine. A Reuters poll revealed this.

Analysts said that core consumer prices in Tokyo rose in March at the fastest rate since over two years. This was due to higher electricity and gas prices.

Analysts polled at Reuters believe that “tankan”, the BOJ survey closely monitored by the media, will show that the main index for large manufacturers’ sentiment fell to +12 in April from +18 in the prior three months.

Analysts at Mitsubishi UFJ Research and Consulting stated that companies saw a rise, due to surging commodity costs and a weak yen. A parts shortage led to production cuts and pushed down business conditions.

This data was not favorable for Bank of Japan (BOJ), as it warned of economic risks from Ukraine’s crisis at its March policy conference. It also continued its huge stimulus Friday.

The poll indicated that confidence among large non-manufacturers likely declined, however, it did not slip into net pessimism. It was at plus 5 in the poll, down from December’s plus 9.

Large manufacturers predicted that conditions will continue to deteriorate in three months. The reading dropped to +10, a sign there is growing uncertainty about the company’s outlook. However large non-manufacturers anticipated an increase to plus 8.

Also, it is likely that the tankan will show big companies increasing their capital expenditure plans by 4.4% during the current fiscal, which is lower than the 9.3% increase predicted in the survey.

The BOJ will release the results of its quarterly tankan survey on April 1, at 8:50 AM local time (March 31, at 2350 GMT).

A separate report due on March 24 will reveal that Tokyo core consumer price indexes, which do not include fresh food, are expected to rise by 0.7% from last year. This is the largest increase in prices since January 2020.