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Japanese firms more confident despite woe
01.10.09
Japanese companies' views on their prospects have improved for the second quarter running, the central bank's highly-regarded tankan survey showed today.
The Bank of Japan's tankan index rose to minus 33 having fallen to a record low of minus 58 in March and increasing to minus 38 three months ago. The index represents the proportion of companies calling conditions good less those who say they are bad.
“The numbers are turning for the better slightly, but the situation remains severe,” chief cabinet secretary Hirofumi Hirano said.
Economists pointed out that while sentiment may be improving conditions remain incredibly tough for many Japanese companies. Most of them told the survey that they are still cautious about investing for the future, believe they have too many workers and have excess production capacity.
Coupled with low consumer confidence and falling prices, the tankan signals that recovery for the world's second-biggest economy remains fragile.
Major manufacturers and non-manufacturing companies unexpectedly cut their capital spending plans and now expect to reduce expenditure by an average 10.8% this financial year.
