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Reuters/ The Bank of Japan building is pictured in Tokyo March 18, 2009.
Reuters/
9:49 JST, October 2, 2023
TOKYO, Oct 2 (Reuters) – Japan’s business sentiment improved in the three months to September, a central bank survey showed on Monday, suggesting the economy is weathering headwinds from slowing global growth for now.
The headline big manufacturers’ confidence index rose to 9 in September from 5 in June, the Bank of Japan’s closely-watched “tankan” survey showed, compared with a median market forecast for a reading of 6.
Big non-manufacturers’ index stood at 27, up from 23, the survey showed, against a median market forecast of 24.
Big firms expect to increase capital expenditure by 13.6% in the current fiscal year ending in March 2024, matching market estimates, the survey showed.
The tankan is likely to be closely scrutinized by BOJ policymakers in determining whether economic conditions are falling into place to start raising interest rates.
Japan’s economy expanded an annualized 4.8% in April-June as robust exports offset weaknesses in consumption. But analysts expect a mild contraction in the July-September quarter as sluggish global demand weigh on exports.
Corporate earnings and business sentiment will be key to whether wages will keep rising next year in tandem with higher inflation, and lay the groundwork for the BOJ to phase out its massive monetary stimulus.
