- Title: JAPAN: Bank of Japan business sentiment survey shows less pessimism
- Date: 2nd July 2009
- Summary: TOKYO, JAPAN (JULY 01, 2009) (REUTERS) BANK OF JAPAN (BOJ) BUILDING PEOPLE WALKING IN FRONT OF THE BOJ BUILDING BOJ SIGN JAPANESE FLAG BOJ BUILDING AND JAPANESE FLAG
- Embargoed: 17th July 2009 13:00
- Location: Japan
- Country: Japan
- Topics: Finance
- Reuters ID: LVA6AKQSC9AS3UXOV60NZHL1E1D6
- Story Text: A survey by the Bank of Japan shows business confidence among companies has improved from a record low hit three months ago.
Japanese business confidence pulled back from a record low hit three months ago, the Bank of Japan's "tankan" survey on business sentiment, showed on Wednesday (July 1), marking the first rise in two and a half years as reviving global trade boosts Japan's big exporters.
Companies said they expected business conditions to further improve in the next three months, although from very low levels as damage from the global financial crisis persists.
The tankan survey also showed companies are less worried about their funding conditions than in March, when risk-shy investors shunned corporate loans except for those with high credit ratings amid the global financial crisis.
The Bank of Japan has said it was watching closely the tankan survey to decide whether to extend corporate funding measures such as commercial paper and bond buying beyond their planned expiry in September.
The closely-watched survey's main sentiment index for big manufacturers improved to minus 48 in June from a record low of minus 58 in the previous quarterly survey in March.
It was a smaller improvement than a median market forecast of minus 43 and, as a negative number, pessimists still outnumbered optimists.
But the government warned the optimism was not shared by all.
"We still need to keep in mind that small and mid-sized manufacturers are still struggling. Though we believe we've managed to prevent the economy from falling any further, we still need to follow that up and ensure growth and stability for our people," Takeo Kawamura, chief government spokesperson, told a news conference.
The outlook for September stood at minus 30, showing firms expected conditions to improve over the next three months.
Japan's exports and industrial production have rebounded after plunging late last year, as companies worked off inventories and with a global recession showing signs of easing.
Many economists believe the worst for the recession has passed for Japan too, with April-June GDP expected to show a 0.4 percent growth after four straight quarters of contraction.
But any recovery will likely be slow and fragile as companies, hit by slumping profits, hold off on capital spending and cut staff and wages, passing the pain to households.
Analysts also warn that strength in exports and output will peter out later this year unless global markets, particularly the United States, make a sustained recovery.
Japan's Nikkei stock average clawed up 0.1 percent in largely directionless trade.
Response to the Bank of Japan's quarterly survey of business confidence was mixed, with some analysts saying it had no impact on the market, but others, noting lagging capital spending, saying it was slightly negative.
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