The Bank of Japan's tankan business sentiment survey showed on April 1 that confidence among major manufacturers improved in the first quarter of 2013 — the first improvement in three quarters. Their diffusion index (DI) stood at minus 8, up from minus 12 three months earlier. The index represents the percentage of firms saying business conditions are good minus those saying they are bad. The DI for major nonmanufacturers was plus 6, an improvement of two points.

Major firms also expect good business in the near future. The DI for three months later is minus 1, an improvement of seven points, among major manufacturers and plus 9, an improvement of three points, among major nonmanufacturers.

But attention also must be paid to the fact that other data show that the conditions of small and medium-size companies are still difficult and that executives have a cautious attitude toward the longer-term future prospects of the Japanese economy.