Econintersect: The Tankan Summary of business sentiment for Japan jumped into positive territory in the June report issued by the Bank of Japan. The latest reading for manufacturing today (01 June 2013) was +4. The last previous reading three months ago was -8, which had been the lowest since the start of the recovery from the Greta Financial Crisis. The positive reading was the first since the third quarter of 2011. The non-manufacturing sentiment, which has been positive for the past year, moved higher to +12 from +6 after the first quarter.
The most negative sentiment came from businesses relying on dollar based imports (petroleum, coal, etc.). These businesses have been stgruggling because of the 20% decline of the yen vs. the dollar over the last quarter.
MarketWatch reports that both the Australian dollar and the yen gained slightly against the dollar after the announcement.
The following are two quotes from the Financial Times:
The mood of Japan has “totally changed”, said Ryoichi Nishizawa, 35 year-old chief executive of Neo Career, an employment agency which has seen a sharp pick-up in traffic through its café-style advice centres.
“We see a firm recovery in consumption as the stronger corporate outlook on the economy manifests itself in larger summer bonus payouts”, said Naohiko Baba, chief economist at Goldman Sachs in Tokyo, before the release of Monday’s data.
A quote from the BBC:
"The Tankan confirmed that expectations among big Japanese manufacturers for a weaker yen and a steady economic recovery more than offset recent market turmoil," said Takeshi Minami, chief economist as Norinchukin Research Institute, in Tokyo.
"Industrial output is rising slowly, exports are recovering gradually, public works are expected to come out more strongly and next year's sales tax hike will prompt a last-minute buying rush later this year.
"All of these positive factors, together with the effects of 'Abenomics', are encouraging to Japanese firms."
The following two graphs are from the Tankan Report.
- Tankan Summary (June 2013) (Bank of Japan statistics, 01 June 2013)
- Japanese business sentiment turns positive (Ben McClannahan, Financial Times, 01 June 2013)
- Japan's yen regains ground after sentiment survey (Carla Mozee, MarketWatch, 01 July 2013)
- Tankan: Japanese business sentiment turns positive (BBC, 30 June 2013)