Business News
Japan business sentiment rises, but companies reluctant on spending
Oct 1, 2009, 4:50 GMT
Tokyo - The Tankan index of business sentiment among large Japanese companies showed increased optimism that the world's second-largest economy would pick up speed, but also indicated that corporations were cautious on spending, the Bank of Japan said Thursday.
The headline index for the closely watched survey was minus 33 in the second quarter, an improvement from minus 48 for the quarter ending in June. The index was negative for the fifth straight quarter.
However, analysts warned that Japan's export-oriented economy still faced risks, in particular falling prices for export goods, weak domestic demand and the yen strengthening against the dollar, which decreases the competitiveness of Japanese companies abroad.
Japan's big manufacturers of cars, electronics and other goods plan to cut their capital expenditure for the fiscal year through March 2010 by a record 10.8 per cent, the survey showed. The June survey forecast a 9.4-per-cent decrease in spending.
Firms also downgraded their sales forecasts for the full fiscal year.
Stock markets lost ground following the survey's release.
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