Tokyo - Arabstoday
Confidence among major Japanese manufacturers remains weak despite the yen’s fall from historic highs and an ongoing tentative recovery following last year’s quake-tsunami, figures showed on Monday. The Bank of Japan’s closely watched quarterly Tankan survey came in at minus four, its second consecutive quarter in negative territory and below economists’ expectations for a reading of minus one. The numbers, likely to spark expectations of further monetary easing by the Bank of Japan, suggest corporate managers have a cautious view of a recovery for the world’s third-biggest economy. The results were “slightly weaker than our expectations as corporate sentiment was more cautious than we had expected it to be on the economy’s outlook,” said Norio Miyagawa, Mizuho Research and Consulting senior economist. The figure represents the percentage of companies saying business conditions are good minus those saying conditions are bad. The survey is taken into account by the Bank of Japan (BoJ) when formulating monetary policy. In February, the bank surprised markets after saying it would increase an asset purchase programme by 10 trillion yen ($120 billion) to about 65 trillion yen amid efforts to kickstart Japan’s stagnant economy. In the survey released Monday, sentiment among large non-manufacturing firms improved slightly to plus five in March, compared with plus four in December. Large manufacturers kept their outlook at minus four, unchanged from December when concerns about the global economy, Europe’s debt crisis and the strong yen weighed. A strong currency makes Japanese exporters’ products more expensive overseas and erodes the value of their repatriated foreign profits. The survey showed firms expect the yen to trade at 78.14 on average against the dollar in the fiscal year starting April 1, an surprisingly strong outlook for the Japanese currency. The greenback was trading at a stronger 83 yen level on Monday, well above its post-World War II low of 75.32 yen in October.