Japanese business sentiment improved in the second quarter as raw material costs peaked and the removal of pandemic curbs lifted factory output and consumption, a central bank survey showed, a sign the economy was on course for a steady recovery.
Companies expect to increase capital expenditure and project inflation to stay above the Bank of Japan's 2% target five years ahead, the quarterly tankan showed, offering policymakers hope that conditions for phasing out their massive monetary stimulus may be gradually falling into place.
"The tankan confirmed our view that Japan's economy is on track for a moderate recovery," said Atsushi Takeda, chief economist at Itochu Economic Research Institute.