Japan Business Confidence Q1 2017


Japan: Business sentiment improves again in Q1

April 3, 2017

According to the Bank of Japan’s quarterly Tankan business survey, sentiment among large manufacturers jumped to the highest level in over a year on the back of a weakening yen and rising global demand. The index rose from 10 in Q4 to 12 in Q1, falling below a reading of 14 projected by a median market forecast. The Tankan's business survey is calculated by subtracting the number of respondents who say economic conditions are improving from those who say they are deteriorating. A positive reading means optimists outnumber pessimists.

Confidence in non-manufacturing industries rose from Q4’s 18 to 20 in Q1, which represents the highest value in a year.

Manufacturers’ mood is rising as the export-driven economy is benefiting from increased demand for Japanese goods and a weak yen. As a result, the forward-looking indicator for the next three months rose from the last quarter’s 8 to 11, which represented the highest level reading since Q2 2015.

Meanwhile, large manufacturers forecast that the Japanese yen will average 108.4 JPY per USD in the second half of the fiscal year 2017 (ending March 2018).

Author: Ricard Torné, Lead Economist

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Japan Business Confidence Chart

Japan Business Confidence Q1 2017

Note: Quarterly index of business sentiment. Values above 0 for manufacturers (actual result) indicate a positive assessment of the current business conditions. Values above 0 for manufacturers (forecast) indicate a positive assessment for the next quarter’s business prospects.
Source: Bank of Japan (BoJ).

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