Japan: Business confidence deteriorates in fourth quarter
December 15, 2011
Sentiment among major manufacturers slid, as the high yen and slower global economic growth take their toll on the export-reliant economy. According to the quarterly TANKAN business survey elaborated by the Bank of Japan, sentiment among large manufacturers fell to minus 4 points in the fourth quarter, which contrasted the plus 2 points registered in the third. Moreover, the print came in below market expectations that had business sentiment at minus 2 points. The index is calculated by subtracting the percentage of firms saying business conditions are bad from those saying they are good, whereby a negative number means pessimists outnumber optimists. The deterioration seen in the Q4 reading was broad-based. Among the worst-hit sectors were electrical machinery and the nonferrous metals industry, although the motor vehicles category improved markedly. Meanwhile, business confidence in the non-manufacturing industry grew from plus 1 point in the third quarter to plus 4 points in the fourth. Furthermore, large enterprises in the manufacturing sector anticipate conditions will continue to deteriorate next quarter, with the forward-looking forecast index falling to minus 5 points.