Japan: Business sentiment turns positive for first time in almost two years
July 1, 2013
According to the quarterly TANKAN business survey elaborated by the Bank of Japan, sentiment among large manufacturers rebounded into positive territory for the first time since Q3 2011, suggesting that manufacturers remain confident in Prime Minister Shinzo Abe policies to support economic growth. The index rose from minus 8 points in the first quarter to plus 4 points in the second, which also marks the highest reading observed since Q1 2011. Moreover, the print overshot market expectations that had the index rising to plus 3 points. A positive reading means that optimists outnumber pessimists.
Meanwhile, confidence in non-manufacturing industries improved further from 6 points in the first quarter to 12 points in the second. As a result, the index now sits at its highest level registered since March 2008.
Going forward, large enterprises in the manufacturing sector anticipate conditions will be even more positive, with the forward-looking forecast index bouncing back into positive territory and rising to 10 points in the second quarter (Q1: -1 points), which represents its highest level since Q4 2007. Big manufacturers see the Japanese yen trading at an average of 91.2 JPY per USD by the end of the fiscal year 2013.