FILE PHOTO: A man runs on a crosswalk at a business district in central Tokyo, Japan September 29, 2017. REUTERS/Toru Hanai
October 1, 2021
By Tetsushi Kajimoto and Leika Kihara
TOKYO (Reuters) -Japanese business confidence improved for a fifth straight quarter in the three months to September, a central bank survey showed on Friday, a sign the economy was steadily emerging from the slump caused by the coronavirus pandemic.
Large companies expect to increase capital expenditure by 10.1% in the current fiscal year ending in March 2022, the survey showed, backing up the central bank’s view robust corporate-sector activity will offset some of the weakness in consumption.
The survey bodes well for Fumio Kishida, who will succeed Prime Minister Yoshihide Suga next week with a mandate to pull the economy out of the pandemic-induced doldrums and distribute more wealth to households.
The headline index gauging big manufacturers’ sentiment stood at plus 18 in the third quarter, up from plus 14 in the previous quarter, the Bank of Japan’s (BOJ) closely-watched tankan survey showed.
It compared with a median market forecast for plus 13.
“With growing technology demand globally, electronic machines and production facilities continued growth – this covered the dip in automobile sector,” said Takumi Tsunoda, senior economist at Shinkin Central Bank Research.
“The outlook is a little worrisome as supply chain strains are gradually spreading to sectors other than carmakers, such as machines and electronics that also rely on components made in elsewhere in Asia.”
Big non-manufacturers’ sentiment index improved to plus 2 from plus 1 in June, against a median market forecast for a flat reading and posting a fifth straight quarter of improvement, the survey showed.
Big manufacturers expect sentiment to worsen to 14 three months ahead, while large non-manufacturers’ mood was seen to continue rising to plus 3, it showed.
The survey will be among factors the BOJ will scrutinise when it meets for a rate review on Oct. 27-28 and revises its quarterly growth and inflation projections.
Robust exports driven by solid global demand have helped offset weak consumption and pull Japan’s economy out from the severe slump last year caused by the pandemic.
But chip shortages and supply disruptions caused by Asian factory shutdowns have hit production of Japanese manufacturers, threatening to derail the country’s fragile recovery.
(Reporting by Tetsushi Kajimoto and Leika Kihara; additional reporting by Kantaro Komiya; Editing by Sam Holmes)
Source: One America News Network
