Tokyo – Business confidence among Japan’s major manufacturers remained unchanged in the latest quarter from the previous quarter, according to a closely watched survey called the Tankan released on Tuesday.
According to the Bank of Japan’s survey, the benchmark index for the July-September period was +13, the same as the previous survey conducted from April to June.
A positive number means more companies are optimistic than pessimistic about business conditions.
The index for large non-manufacturing companies was +34, up from +33 in the previous quarter.
The results were in line with analyst expectations.
Japan’s economic growth is considered to be on a relatively solid footing, managing to continue growing despite pressures such as a shrinking workforce, a weak currency, and years of deflationary pressures.
However, recent data shows that average wages are holding steady or increasing in some sectors, increasing market optimism. Tourism, which brings in overseas income, is booming now that restrictions related to the coronavirus pandemic have been lifted.
The Tankan is one piece of data that is closely monitored to show what actions central banks will take regarding interest rates. The Bank of Japan ended negative interest rates in March and raised the short-term policy rate to 0.25% in July.
The Bank of Japan is willing to continue raising interest rates if conditions support its view that the 2% inflation target is maintained.
According to the latest Tankan, Japanese companies expect consumer prices to rise 2.4% in a year’s time, the same rate stated in a survey three months ago.
Japan’s economy, the world’s fourth largest, grew at an annual rate of 2.9% as wage increases and consumer spending continued to grow despite risks from economic slowdowns in China and the United States, according to government data.
Political changes are also a factor. Prime Minister Fumio Kishida resigned as planned on Tuesday before his likely successor, Shigeru Ishiba, took office later that day. However, no major economic policy changes are expected.
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Yuri Kageyama appears on X: https://x.com/yurikageyama
