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Confidence among Japan’s big manufacturers improve for first time in nearly two years
Last quarter’s improvement snapped the five consecutive quarters of declining optimism among the large firms.
Business sentiment among large manufacturers in Japan improved in the second quarter for the first time in nearly two years according to the latest “tankan” survey by the central bank.
The Bank of Japan’s closely watched quarterly survey showed the headline index measuring business confidence among the major manufacturers rose to plus 5 last quarter, rebounding from the two-year low of plus 1 seen in the first three months of the year.
Last quarter’s optimism was stronger than expected as the actual reading beat the forecast of plus 3. Year on year, the latest index was still lower than the plus 9 seen in the second quarter of last year.
The latest figure snapped the five consecutive quarters of declining optimism among the large firms and the unchanged figure in the October-December 2022 survey.
Large manufacturers also revealed plans to boost capital expenditure by 19.3% in the fiscal year ending March 2024, which would outpace the projected 13.4% spending hike for all industries that include non-manufacturing sectors.
Despite improving sentiment, the outlook for the job market remained gloomy across the country’s manufacturing sector according to the survey.
“The June survey showed a relatively high growth rate for this time of year with solid results. As a whole, the survey indicates a growing appetite for capital investment in response to the shift to green technologies and efforts towards digitalization,” said Shotaro Kugo, senior economist at the Daiwa Institute of Research.
