— September +8 Reading Highest Since March 2003
— BOJ Projects Sentiment Index to Fall to -1 in December
— All-Firm FY10 Capex Revised Down To -1.0% from +0.5% in June
TOKYO (MNI) – Business confidence among large Japanese
manufacturers improved in September for the sixth consecutive quarter to
its highest level in seven and a half years, as Japan’s exports and
production continued to rise on the recovering global economy, according
to the Bank of Japan’s latest quarterly September Tankan corporate
survey released on Wednesday.
However, the index is seen dropping -1 in December based on survey
responses on the outlook. It is the first time in seven quarters that
major manufacturers expect the sentiment to worsen three months ahead.
The Tankan survey headline index — showing current business
sentiment among large manufacturers — improved to +8 in September from
+1 in June.
The September reading was the highest since +11 in March 2003 and
marked the second consecutive positive reading.
The benchmark September figure came in better than the consensus
call of +6, with economist forecasts ranging from +3 to +8.
The improvement in business sentiment slowed as the yen surged
to a 15-year high due to concerns over the outlook for the U.S. economy
and Japanese stock prices plunged on worries about the nation’s
export-reliant economic recovery.
The Tankan results will likely undermine the BOJ’s baseline view
that the nation’s economy is expected to return to a sustainable
recovery path and prompt the BOJ board members to strongly consider
taking additional credit easing steps at its meeting on Monday and
Tuesday next week.
The assumed dollar-yen exchange rate expected by major
manufacturers is Y89.66 in the September survey, compared with an
average Y90.18 in the previous Tankan.
At 0013, dollar-yen was trading at Y83.96, little changed from its
level prior to the Tankan release.
tokyo@marketnews.com
** Market News International Tokyo Newsroom: 81-3-5403-4833 **
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