JAPAN: SURVEY SHOWS BUSINESS SENTIMENT AMONG BIG MANUFACTURERS HAS DETERIORATED SHARPLY

Record ID: 469363

  • Title: JAPAN: SURVEY SHOWS BUSINESS SENTIMENT AMONG BIG MANUFACTURERS HAS DETERIORATED SHARPLY
  • Date: 3rd July 2001
  • Summary: (W2) TOKYO, JAPAN (FILE)(REUTERS) 1. SLV PAN EXTERIOR OF BANK OF JAPAN; SLV JAPANESE FLAG (2 SHOTS) 0.15 (W2) TOKYO, JAPAN (JULY 2, 2001) (REUTERS) 2. (SOUNDBITE)(English) YASUSHI OKADA, CHIEF ECONOMIST, CREDIT SUISSE FIRST BOSTON SECURITIES, SAYING "Actually the sum of the leading economic indicators, not the theoretical ones but the empirical ones, they are suggesting that this time the deterioration is very fast but its also starting to show a possibility of recovery. On the company side the inventory adjustment is a bit quicker than we thought, but everything depends on the outside control of the overseas economic engines." 0.54 3. SLV BUSINESS DISTRICT OF TOKYO WITH WORKERS WALKING ON STREET AND TRAFFIC (5 SHOTS) 1.21 (W2) TOKYO, JAPAN (FILE) (REUTERS) 4. SLV CAR MANUFACTURING ASSEMBLY LINE (4 SHOTS) 1.41 (W2) TOKYO, JAPAN (JULY 2, 2001) (REUTERS) 6. SLV TOKYO STOCK EXCHANGE INTERIORS; ELECTRONIC BOARDS; MV/SCU FOREIGN EXCHANGE TRADERS TRADING DOLLARS AND YEN (11 SHOTS) 2.32 Initials Script is copyright Reuters Limited. All rights reserved
  • Embargoed: 18th July 2001 13:00
  • Keywords:
  • Location: TOKYO, JAPAN
  • Country: Japan
  • Reuters ID: LVA6O1G8XPQ831CJ01YOWJNYQX2O
  • Story Text: A key Bank of Japan (BOJ) survey showed that business
    sentiment among big manufacturers has deteriorated sharply,
    giving yet more reason to believe the world's second-biggest
    economy may be in recession.

    The Bank of Japan's quarterly "tankan" short-term
    corporate survey announced on Monday (July 2) a drastic drop
    in corporate sentiment in Japan.

    The survey's headline figure of minus 16 for the sentiment
    diffusion index (DI) reading for large manufacturers, diving
    from minus five in March, worsened for the first time in nine
    quarters.

    It was exactly in line with the minus 16 forecast in a
    Reuters survey of 16 economists conducted last week,
    indicating major Japanese company see themselves in a
    recession.

    However economists were quick to note that sentiment may
    not be everything.

    "Actually the sum of the leading economic indicators, not
    the theoretical ones but the empirical ones, they are
    suggesting that this time the deterioration is very fast but
    its also starting to show a possibility of recovery," said
    Credit Suisse First Boston chief economist, Yasushi Okada.

    The index subtracts the percentage of firms reporting
    unfavourable conditions from those with favourable responses.

    A positive reading means optimists outnumber pessimists.

    The tankan is a fervently watched bellwether of the
    world's second-biggest economy which contracted slightly in
    the first three months of this year. It is closely monitored
    by financial markets for clues to the BOJ's monetary policy.

    The survey came just days after the central bank decided
    not to ease already ultra-loose monetary policy further
    despite a string of economic data pointing to a second
    straight quarter of contraction.

    Some economist however see a silver lining to the dark
    clouds on the horizon.

    Markets were not at all reassured by the day's figures.

    Tokyo shares faltered in mid-morning trade as weakness in
    the Bank of Japan's key "tankan" business survey rekindled
    concerns over the country's foundering economy.

    The Nikkei stock average fell 225.85 points or 1.74
    percent to 12,743.20. The broader, capital-weighted TOPIX
    index slumped 15.09 points or 1.16 percent to 1,285.89.

    Meanwhile, the dollar briefly touched a three-month high
    on the yen after tankan confirmed the market's belief that
    Japan's poor fundamentals justified a weaker currency.

    The dollar also had the euro under pressure again as bears
    bet the European Central Bank would be too wary of inflation
    to cut interest rates at its meeting this week.

    The dollar did briefly change hands at 125.00 yen through
    brokers, but it quickly faded to 124.63 in late morning trade,
    leaving it a shade softer than New York's late 124.67.


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