— Japan MOF: Q2 Major Firm Sentiment -22.0 Pt Vs Q1 -1.1 Pt
— Japan MOF: Q2 Sentiment Worse Than +1.5 Pt Seen In Q1 Poll
— Japan MOF: Major Firm Sentiment Seen Q3 +4.4 Pt, Q4 +11.3 Pt
— Japan MOF: FY11 All Firm Capex Plans +4.9% Vs Q1 Poll -0.5%
— Japan MOF: FY11 All Firm Current Profit -1.1% Y/Y Vs Q1 +6.4%

TOKYO (MNI) – The business sentiment diffusion index for major
Japanese firms tumbled to -22.0 points in April-June from -1.1 points in
the previous quarter, as the March 11 earthquake crippled production and
supply chains, the results of a quarterly government survey released on
Tuesday showed.

In the previous survey released in March, the index for the second
quarter of 2011 was forecast to improve to +1.5 point.

Business sentiment hit a recent bottom of -51.3 points in
January-March 2009.

The index is computed by subtracting the percentage of companies
reporting deteriorating business conditions from the percentage of those
reporting an improvement. A positive figure indicates the majority of
firms see better business conditions.

The latest survey also showed that major firms’ sentiment is
expected to rise to +4.4 points in July-September of 2011 (revised down
from +6.2 points seen in the previous survey) before rising further to
+11.3 points in October-December (initial reading).

A rebound in sentiment in the coming quarters are expected as
manufacturers are stepping up their efforts to fix the battered
production facilities and supply chains in northeastern Japan.

Toyota and other automakers plan to raise their output levels to
pre-quake levels as early as July.

The MOF survey showed that companies expect their combined capital
spending to rise 4.9% in fiscal 2011, up from a 0.5% drop seen in the
March poll.

Manufacturers plan a 6.9% hike in spending in this fiscal year, up
from a 1.6% increase seen in the previous survey, while
non-manufacturers forecast a 3.8% rise in outlays, compared with a 1.7%
drop in the March poll.

The survey showed firms’ current profits will fall 1.1% in fiscal
2011, down from +6.4% forecast in the previous survey.

The Finance Ministry and the Cabinet Office conducted the joint
survey on May 15, covering 15,803 companies capitalized at Y10 million
or over, of which 12,251 replied.

tokyo@marketnews.com
** Market News International Tokyo Newsroom: 81-3-5403-4835 **

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