Japan business confidence increases again after virus plunge
15 December, 2020
Confidence among key Japanese manufacturers has recovered further after plunging on pandemic woes to it has the worst level since the global financial crisis, an integral survey showed Monday.
The Bank of Japan's December Tankan business survey -- a quarterly poll around 10,000 companies -- showed a reading of minus 10 among big manufacturers, after recording minus 27 in the last survey and minus 34 in the June survey.
The latest figure weighed against market consensus estimate of minus 15.
The June figure was the lowest since June 2009 when worldwide financial shocks hammered the planet's third-largest economy.
The short-term business sentiment survey reports the difference between the percentage of businesses that are upbeat and those that see conditions as unfavorable.
A negative reading means considerably more companies are pessimistic than optimistic. It is considered to be the broadest indicator of how Japan Inc is usually faring.
The latest reading employs the government the other day approved a lot more than $700 billion in fresh stimulus to invest in projects from anti-coronavirus measures to green tech, the country's third such package this financial year.
"The sharp rebound in the Q4 Tankan supports our viewpoint that Japan's economy will rebound relatively swiftly from the dislocation due to the pandemic," said Tom Learmouth, Economist at Capital Economics in a commentary.
Japan officially exited economic downturn last month after three quarters of contraction, but the world's third-most significant economy now faces a spike in COVID-19 infections, with track record numbers of new conditions reported in new weeks.
The latest survey also comes prior to the Bank of Japan's two-day monetary policy meeting from Thursday, which is widely likely to keep the current financial easing tools but also more likely to extend its special steps in response to COVID-19.
"We are convinced the BOJ will describe that the economy remains to want policy support, specifically with higher uncertainty due to the arrival of a third wave of infections," UBS economists Masamichi Adachi and Go Kurihara explained in a report.
Confidence among big non-manufacturers improved to minus 5 -- against market consensus of minus 6 -- after logging minus 12 in September.
The latest figures show a steady recovery from the low of minus 17 in June, but are still well below the March figure of plus 8.
Japan was struggling with the effects of normal disasters and a good hike in intake tax even prior to the pandemic crippled the global economy.
Once it hit, there have been zero mandatory lockdowns in the united states, with the government instead asking people to stay in the home -- a demand that was largely heeded.
But that, in conjunction with a shuttering of the country's borders, battered tourism and client spending, with the hospitality sector hit particularly hard.
Source: japantoday.com
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