Business / Economy

Bank of Japan's tankan likely to show slump in manufacturing sentiment, projections say


The Bank of Japan’s quarterly tankan survey for March is likely to show a slump in business sentiment among major Japanese manufacturers, according to the latest projections by 12 private think tanks.

Their average forecast points to a fall to plus 13 in the headline diffusion index for large manufacturers’ business confidence, down from plus 19 in the December 2018 survey and the lowest figure since March 2017.

All the 12 think tanks foresee a fall in the manufacturing sentiment DI.

The dismal forecast mainly reflects the adverse implications of U.S.-China trade friction for Japan’s exports and production.

The results of the March survey are due to be released on April 1.

The DI for large manufacturers’ business outlook over the next three months is estimated at plus 12. Eight of the 12 institutes project a further deterioration in sentiment.

“Business sentiment is believed to have sharply worsened in sectors including production machinery, which is badly affected by slowing demand from China,” an official of the NLI Research Institute said.

Meanwhile, the DI for large nonmanufacturers’ present sentiment is projected to sag to plus 22 from plus 24, weighed down by labor shortages but partly supported by solid consumption.

Capital expenditures at large manufacturers and nonmanufacturers in fiscal 2019, starting on April 1, are seen decreasing 0.2 percent from the previous year.

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