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Japan big firms’ business sentiment slumps in first quarter

JIJI

Business sentiment among major Japanese companies in January-March turned negative for the first time in three quarters, affected by stock price falls and the yen’s rise earlier this year, a quarterly government survey showed Friday.

The business sentiment index for companies with capital of ¥1 billion or more stood at minus 3.2, against plus 4.6 for the previous quarter, according to the joint survey by the Finance Ministry and the Cabinet Office as of Feb. 15.

The index represents the percentage of companies seeing their business conditions improve from the previous quarter minus that of firms feeling the opposite.

The index came to minus 2.8 for midsize companies with capital of ¥100 million to less than ¥1 billion and at minus 16.6 for small companies with capital of ¥10 million to less than ¥100 million.

For April-June, minus figures were expected for all of the big, midsize and small companies.

The January-March index stood at minus 7.9 for large manufacturers and minus 0.7 for large nonmanufacturers.

It was the first time since the April-June 2014 quarter for both indexes to be negative. In April that year, the country raised its consumption tax rate from 5 percent to 8 percent.

Lower crude oil prices dealt a blow mainly to chemical producers, weighing down the index for large manufacturers, government officials said.