Japan business mood improves, bodes well for BOJ tankan

Sun Dec 8, 2013 7:44pm EST
 
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By Tetsushi Kajimoto and Leika Kihara

TOKYO (Reuters) - Japanese business confidence improved in the three months to December and is predicted to continue rising, a Reuters poll showed on Monday, adding to evidence of a steady recovery in the world's third-largest economy.

The positive outcome suggests the central bank's closely watched "tankan" quarterly survey, due out on December 16, will show a continued recovery in business sentiment as the benefits of premier Shinzo Abe's stimulus policies broaden.

Data released on Monday showed Japan's economy expanded less than expected in July-September, suggesting that the recovery remains fragile due to soft global demand.

Still, analysts were optimistic about the medium-term outlook.

"There are already signs that exports and capital expenditure are recovering, so I am not pessimistic about the outlook," said Yasuo Yamamoto, senior economist at Mizuho Research Institute in Tokyo.

"Economic growth should start accelerating again in the fourth quarter as domestic demand strengthens before the sales tax increase."

Third-quarter growth was revised down to a 0.3 percent increase from a preliminary 0.5 percent rise, compared with a median market forecast centered on a 0.4 percent increase.

That translates into an annualised 1.1 percent growth, down from an initial reading of 1.9 percent and lower than that of the U.S. economy, which grew at a 3.6 percent annual rate.   Continued...

 
Pedestrians walk past the Bank of Japan building in Tokyo October 31, 2013. REUTERS/Yuya Shino