BOJ Tankan Likely to Show Slight Uptick in Biz Sentiment

Tokyo, March 31 (Jiji Press)–The Bank of Japan’s “tankan” quarterly survey for March, due out Wednesday, is expected to show slightly stronger business sentiment among both major Japanese manufacturers and nonmanufacturers, according to estimates by eight private think tanks. The think tanks forecast on average that the headline diffusion index for large manufacturers’ current business conditions will stand at plus 17, up 1 point from the previous December survey. While strong demand for semiconductors is expected to support the modest improvement, the business outlook is forecast to weaken due to concerns over rising tensions in the Middle East. The DI is calculated by subtracting the percentage of companies reporting bad business conditions from those reporting good conditions. The forecasts were based on a new standard due to a review of the companies surveyed. The average DI forecast for major nonmanufacturers is projected at plus 34, down 2 points. Mitsubishi UFJ Research and Consulting Co. expects business sentiment in the retail sector and the hotel and restaurant industries to deteriorate due to a fall in the number of foreign visitors to Japan amid deteriorating Japan-China relations. The business condition outlook DI for June stands at plus 13 for large manufacturers, down 2 points, and at plus 29 for large nonmanufacturers, down 2 points. Mizuho Securities Co. said that Japan-China relations and tensions in the Middle East may cast a shadow chiefly over business outlooks. “If crude oil prices continue to rise, the impact will become apparent in a wider range of industries,” Meiji Yasuda Research Institute Inc. said. END [Copyright The Jiji Press, Ltd.]