By Akiko Takeda
TOKYO, March 19 (Reuters) - The Bank of Japan's closely watched tankan survey is likely to show confidence at Japanese firms improved for a fourth consecutive quarter as exports drive an economic recovery, a Reuters poll showed.
The quarterly corporate survey for March is also expected to show big firms plan to cut annual capital spending by 0.5 percent after slashing expenditure by a record 28.2 percent for the year that ends this month.
The March tankan is expected to show the sentiment index for big manufacturers improving 11 points to minus 13 and that for big non-manufacturers rising five points to minus 17, bigger improvements than seen in the previous tankan.
'Exports and output are doing very well, and this is helping companies gradually regain confidence,' said Tetsuro Sawano, senior fixed income strategist at Mitsubishi UFJ Securities.
The Bank of Japan will next meet for a policy review on April
6
7 but is not expected to embark on new steps after having just decided on March 17 to double the amount of funds available to banks for three-month loans, analysts say.
The government had urged the BOJ for weeks to take more easing measures, a move analysts say is aimed at preventing a rise in the yen from hurting exports and deepening deflation.
A large gap between supply and demand means the BOJ's funding operation is unlikely to slow deflation soon. The central bank could face further pressure as the government tries to show voters it is being proactive on the economy before an election expected in July.
'The data would support the BOJ staying on hold for a while. But the government is likely to complain as the election approaches, because the level of the recovery is still low,' said Sawano.
The median forecast for big manufacturers would be the least pessimistic since September 2008. The poll of 27 economists by Reuters also shows they expect big manufacturers' mood to improve further to minus 8 and non-manufacturers' sentiment to rise to minus 14 in June.
The indexes are derived by deducting the percentage of respondents who say conditions are poor from those who say they are good. Negative readings mean pessimists outnumber optimists.
The BOJ will change the way in calculates the tankan from the March survey by increasing the number of companies covered to 11,684 from 10,116.
Confidence at big manufacturers hit a record low of minus 58 in March 2009 and big non-manufacturers sentiment tumbled to a decade low of minus 31 as the global financial crisis pushed Japan into its worst recession since World War Two.
Japan had a spotty recovery last year from recession and some economists say growth could slow in the first half of this year as the impact of subsidies on energy-efficient goods fades.
The monthly Reuters Tankan survey, which is closely correlated with the BOJ's tankan, showed manufacturing sentiment rose in March to the highest level since June 2008, suggesting their sentiment index could come close to positive territory in June.
Following are economists' forecasts for the tankan.
BIG MANUF BIG NON-MANUF CAPEX
March June March June
Median -13 -8 -17 -14 -0.5
High -8 -2 -12 -7 4.0
Low -18 -14 -22 -20 -10.0
Goldman Sachs -18 -13 -22 -20 -9.7
Daiwa SB Investments -17 -10 -19 -14 -3.0
Mitsubishi UFJ R&C -17 -12 -18 -14 0.1
Norinchukin Research -16 -14 -19 -18 -2.0
Mizuho Research -16 -13 -20 -19 4.0
Barclays Capital -16 -8 -20 -16 3.0
Shinkin Central Bank -16 -11 -18 -15 -0.4
Credit Suisse -16 -12 -17 -15 -10.0
Credit Agricole CIB -15 -10 -17 -15 -0.5
Mitsubishi Research -14 -8 -18 -16 -1.9
Japan Research -14 -7 -18 -15 -1.9
Citigroup Global Markets-14 -8 -16 -13 0.5
RBS -14 -8 -18 -15 2.0
BNP Paribas -13 -8 -16 -13 -0.1
DIR -12 -8 -17 -14 2.3
Mitsubishi UFJ Sec -12 -8 -16 -13 -0.5
JP Morgan -12 -5 -18 -15 -10.0
Nomura Securities -12 -9 -15 -13 1.1
Dai-ichi Life Research -12 -9 -17 -13 -3.0
HSBC Securities -12 -9 -16 -15 -0.6
Shinko Research -12 -8 -16 -14 -0.5
Monex -12 -8 -15 -11 -0.2
Itochu Corp -11 -8 -18 -16 0.8
Meiji Yasuda Life -10 -5 -14 -10 2.8
Morgan Stanley -9 -3 -16 -13 0.7
Sumitomo Mitsui AM -8 -3 -13 -8 -2.5
Nikko Cordial Sec -8 -2 -12 -7 -0.8
(Writing by Stanley White; Editing by Edwina Gibbs)
((stanley.white@thomsonreuters.com; +81 3 6441 1984; Reuters Messaging: stanley.white.reuters.com@reuters.net)) Keywords: JAPAN ECONOMY/TANKAN (If you have a query or comment on this story, send an email to news.feedback.asia@thomsonreuters.com) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
TOKYO, March 19 (Reuters) - The Bank of Japan's closely watched tankan survey is likely to show confidence at Japanese firms improved for a fourth consecutive quarter as exports drive an economic recovery, a Reuters poll showed.
The quarterly corporate survey for March is also expected to show big firms plan to cut annual capital spending by 0.5 percent after slashing expenditure by a record 28.2 percent for the year that ends this month.
The March tankan is expected to show the sentiment index for big manufacturers improving 11 points to minus 13 and that for big non-manufacturers rising five points to minus 17, bigger improvements than seen in the previous tankan.
'Exports and output are doing very well, and this is helping companies gradually regain confidence,' said Tetsuro Sawano, senior fixed income strategist at Mitsubishi UFJ Securities.
The Bank of Japan will next meet for a policy review on April
6
7 but is not expected to embark on new steps after having just decided on March 17 to double the amount of funds available to banks for three-month loans, analysts say.
The government had urged the BOJ for weeks to take more easing measures, a move analysts say is aimed at preventing a rise in the yen from hurting exports and deepening deflation.
A large gap between supply and demand means the BOJ's funding operation is unlikely to slow deflation soon. The central bank could face further pressure as the government tries to show voters it is being proactive on the economy before an election expected in July.
'The data would support the BOJ staying on hold for a while. But the government is likely to complain as the election approaches, because the level of the recovery is still low,' said Sawano.
The median forecast for big manufacturers would be the least pessimistic since September 2008. The poll of 27 economists by Reuters also shows they expect big manufacturers' mood to improve further to minus 8 and non-manufacturers' sentiment to rise to minus 14 in June.
The indexes are derived by deducting the percentage of respondents who say conditions are poor from those who say they are good. Negative readings mean pessimists outnumber optimists.
The BOJ will change the way in calculates the tankan from the March survey by increasing the number of companies covered to 11,684 from 10,116.
Confidence at big manufacturers hit a record low of minus 58 in March 2009 and big non-manufacturers sentiment tumbled to a decade low of minus 31 as the global financial crisis pushed Japan into its worst recession since World War Two.
Japan had a spotty recovery last year from recession and some economists say growth could slow in the first half of this year as the impact of subsidies on energy-efficient goods fades.
The monthly Reuters Tankan survey, which is closely correlated with the BOJ's tankan, showed manufacturing sentiment rose in March to the highest level since June 2008, suggesting their sentiment index could come close to positive territory in June.
Following are economists' forecasts for the tankan.
BIG MANUF BIG NON-MANUF CAPEX
March June March June
Median -13 -8 -17 -14 -0.5
High -8 -2 -12 -7 4.0
Low -18 -14 -22 -20 -10.0
Goldman Sachs -18 -13 -22 -20 -9.7
Daiwa SB Investments -17 -10 -19 -14 -3.0
Mitsubishi UFJ R&C -17 -12 -18 -14 0.1
Norinchukin Research -16 -14 -19 -18 -2.0
Mizuho Research -16 -13 -20 -19 4.0
Barclays Capital -16 -8 -20 -16 3.0
Shinkin Central Bank -16 -11 -18 -15 -0.4
Credit Suisse -16 -12 -17 -15 -10.0
Credit Agricole CIB -15 -10 -17 -15 -0.5
Mitsubishi Research -14 -8 -18 -16 -1.9
Japan Research -14 -7 -18 -15 -1.9
Citigroup Global Markets-14 -8 -16 -13 0.5
RBS -14 -8 -18 -15 2.0
BNP Paribas -13 -8 -16 -13 -0.1
DIR -12 -8 -17 -14 2.3
Mitsubishi UFJ Sec -12 -8 -16 -13 -0.5
JP Morgan -12 -5 -18 -15 -10.0
Nomura Securities -12 -9 -15 -13 1.1
Dai-ichi Life Research -12 -9 -17 -13 -3.0
HSBC Securities -12 -9 -16 -15 -0.6
Shinko Research -12 -8 -16 -14 -0.5
Monex -12 -8 -15 -11 -0.2
Itochu Corp -11 -8 -18 -16 0.8
Meiji Yasuda Life -10 -5 -14 -10 2.8
Morgan Stanley -9 -3 -16 -13 0.7
Sumitomo Mitsui AM -8 -3 -13 -8 -2.5
Nikko Cordial Sec -8 -2 -12 -7 -0.8
(Writing by Stanley White; Editing by Edwina Gibbs)
((stanley.white@thomsonreuters.com; +81 3 6441 1984; Reuters Messaging: stanley.white.reuters.com@reuters.net)) Keywords: JAPAN ECONOMY/TANKAN (If you have a query or comment on this story, send an email to news.feedback.asia@thomsonreuters.com) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
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