Japan’s business confidence hits 6-year high

TOKYO - Agence France-Presse

Japanese business confidence has surged to its strongest level since December 2007, underscoring growing optimism among big companies amid slowdown. AP photo

Japanese business confidence has soared to a six-year high, the Bank of Japan said today, underscoring growing optimism among major companies despite a slowdown in the world’s third-biggest economy. The BoJ’s quarterly Tankan survey, which polled more than 10,500 firms, surged to its strongest level since December 2007, with a reading for large manufacturers rising to plus 16 from plus 12 in September.

The non-manufacturers’ index also jumped to plus 20 from plus 14, the best reading in more than six years. The numbers represent the percentage of respondents saying conditions are good minus those who say they are poor.

The report was “positive overall”, said Norinchukin Research Institute chief economist Takeshi Minami.
“It’s not that dramatic as we saw in the previous Tankan, but the latest outcome confirmed sentiment even among small and mid-sized companies is improving,” he added.

Some analysts expect the BoJ will unleash further monetary easing measures to boost the economy after growth slowed markedly, highlighting the challenges faced by Tokyo in its bid to stoke growth with big government spending and monetary easing by the central bank.

Japan’s third-quarter economic growth came in at a final reading of 0.3 percent, down from an initial figure of 0.5 percent -- and a sharp slowdown from 0.9 percent growth in the previous quarter.

On an annualized basis, which stretches the data across a full year, growth was 1.1 percent in the quarter against an initial reading of 1.9 percent.

Japan’s had been outpacing other G7 nations as a policy blitz led by Prime Minister Shinzo Abe helped push down the yen, boosting exporters and sparking a stock market rally.