The Bank of Japan’s “tankan” survey showed on Monday that business sentiment among major manufacturers greatly improved in the April-June period, with their diffusion index (DI) at plus 4. But the Abe administration should note that the DI for small and medium-size firms is still negative — minus 14 for manufacturers and minus 4 for nonmanufacturers. Apparently small and medium-size businesses are not benefiting much from the administration’s economic policy.
The Abe government also should pay attention to price increases of imported items due to a weakening of the yen caused by the BOJ’s massive monetary easing. Price rises could dampen consumer spending, thus putting a brake on economic recovery.
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