Japan Business Confidence

Japan

Japan: Business sentiment stabilizes in Q1; prospects improve marginally

April 1, 2015

According to the Bank of Japan’s quarterly TANKAN business survey, sentiment among large manufacturers held steady at Q4’s 12 in Q1. The print came in below the reading of 14 that markets had expected. As a result, the index remains firmly entrenched above the 0-threshold, which means that optimists outnumber pessimists. Despite the recent decline in oil prices and the weakening of the yen, sluggish domestic growth and a tepid global recovery are weighing on manufacturers’ sentiment.

Confidence in non-manufacturing industries improved in Q1, increasing from 14 in Q4 to 16, which marked the highest reading in three quarters.

Large enterprises in the manufacturing sector expect that conditions will improve in the next three months. The forward-looking forecast index rose to 10 in Q1 from 9 in Q4. Meanwhile, large manufacturers forecast that the Japanese yen will average 112.1 JPY per USD in the second half of the fiscal year 2014 (ending March 2015).


Author: Ricard Torné, Lead Economist

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Japan Business Confidence Q1 2015

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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