Confidence at big Japanese manufacturers turned positive in July-September and they expect business conditions to improve further in the following quarter, a government survey showed, suggesting a gradual economic recovery from the slump after April’s sales tax hike.
The survey also showed that companies are growing more positive on business investment, boding well for the government’s goal of fostering a sustainable growth cycle led by pick up in business activity, higher wages and stronger consumer spending.
The business survey index (BSI) of sentiment at large manufacturers stood at plus 12.7 in July-September, improving from minus 13.9 in the prior three months.
The big manufacturers’ sentiment index is seen improving to plus 15.1 in October-December, it showed.
The joint survey by the Ministry of Finance and the Cabinet Office suggests that the central bank’s key tankan survey out on Oct.1 is likely to show a steady improvement in business sentiment in the three months to September.
“It’s true business sentiment soured temporarily after the April sales tax hike. But that hasn’t dampened companies’ spending appetite too much,” said Junko Nishioka, chief Japan economist at RBS Securities.