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Business sentiment among large Japanese companies in the July-September period turned positive for the first time in a year, recovering from a plunge due to the economic impact of the coronavirus pandemic, a government survey showed Friday.

The confidence index covering firms capitalized at ¥1 billion ($9.4 million) or more stood at plus 2.0 in the third quarter of 2020, up from minus 47.6 in the April-June period, according to the joint survey by the Finance Ministry and Cabinet Office.

The outcome reflected the gradual resumption of economic activity throughout the country, following the complete lifting of a state of emergency declaration in late May, under which people had been asked to stay home and nonessential businesses to suspend their operation.

First declared for Tokyo and six other areas in early April, the virus emergency dealt a heavy blow to the world’s third-largest economy, with the reading in second quarter of this year marking the lowest since the first quarter of 2009, when it came to minus 51.3 in the wake of the global financial crisis.

The index had dropped for three straight quarters from the October-December term last year, when minus 6.2 was logged after a consumption tax rate hike from 8 percent to 10 percent on Oct. 1.

The latest survey results also displayed a sentiment gap between big firms and others, with the index for small firms capitalized at ¥10 million or more but less than ¥100 million remaining negative, despite its improvement to minus 25.8 for the reporting quarter from minus 61.1 in the previous period.

For midsize companies capitalized at ¥100 million or more but less than ¥1 billion, the index stood at minus 8.1. It was minus 54.1 in April-June.

The indices are calculated by subtracting the percentage of firms reporting worsening conditions from those observing improvements.

“The outcome showed that business conditions have been picking up among various sectors, especially auto-related manufacturers and operators of restaurant, hotel and transportation services,” a government official told reporters.

“The figure (among large companies) became positive but we believe they are still suffering from the repercussions of the pandemic,” the official added.

By sector, the large manufacturers’ index was plus 0.1, up from minus 52.3 and turning positive for the first time in seven quarters. Notable rebounds were seen in sentiment of car and auto parts makers and information and telecommunication equipment suppliers.

The index for large nonmanufacturers stood at plus 2.9, up from minus 45.3, with the official saying more people dined out and took trips after the stay-at-home requests and advisory against inter-prefecture travel were lifted in May and June, respectively, benefiting the service operators.

Looking forward, the index forecasting business conditions for large companies in the three months through December stood at plus 2.9, and that for the following quarter came to plus 2.4.

The survey covered 14,102 companies capitalized at ¥10 million or more, of which 11,221, or 79.6 percent, had responded by Aug. 15.

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