Bank of Japan says confidence at three-year high
CONFIDENCE among Japan’s biggest manufacturers has risen for the third straight quarter to the best level in more than three years, a key central bank survey showed yesterday as exports continue to grow.
The Bank of Japan’s Tankan report – a quarterly survey of more than 10,000 companies – showed a reading of 17 among major manufacturers, the highest since the first quarter of 2014. The key index, which rose from 12 in the previous survey, also beat market expectations of a result around 15.
The better-than-expected Tankan would normally be good news for Prime Minister Shinzo Abe, who has been trying to revitalise Japan’s economy.
But the results came a day after his Liberal Democratic Party suffered a crushing defeat in elections for the Tokyo municipal assembly.
The vote was seen as a barometer of current public sentiment toward his govern- ment which has been beset by a series of scandals that have dented its support.
Abe swept to power in 2012 on a pledge to cement a lasting recovery in the world’s thirdlargest economy with a growth plan dubbed Abenomics.
The scheme – a mix of aggressive monetary easing and huge government spending along with reforms to the economy – stoked a stock market rally as it weakened the yen and fattened corporate profits, but the effect on the wider economy has been less dramatic.
Recently the country’s prospects have been improving on the back of strong exports, with investments linked to the Tokyo 2020 Olympics also giving the economy a shot in the arm.
The Tankan, closely watched for being the broadest indicator of how Japan Inc is faring, marks the difference between the percentage of firms that are upbeat and those that see conditions as unfavourable.