Japanese business sentiment turned positive in July-September and companies stuck to upbeat spending plans, a government survey showed, offering some relief for policymakers worried about a hit from slowing Chinese growth and ensuing market turmoil.
The poll, the first comprehensive business confidence survey for the current quarter, followed a recent run of gloomy data, including a survey showing the service sector’s mood worsening in August.
“Big manufacturers appear a bit cautious about the outlook, probably due to uncertainty over China. But it’s not as if they are all gloomy since U.S. demand remains strong,” said Takeshi Minami, chief economist at Norinchukin Research Institute.
“Capital expenditure plans remain fairly strong, so I don’t think we need to be too pessimistic about the economy,” he said.
An index gauging sentiment at large manufacturers stood at plus 11.0 in July-September, rebounding from minus 6.0 in the previous quarter, a joint survey by the Finance Ministry and a research arm of the Cabinet Office showed on Friday.
Companies plan to raise capital expenditure by 6.1 percent over the business year that started in April, revised up from the previous poll’s 5.9 percent gain, the survey showed.