Corporate spending a problem for Japan
By Tomoko Hosaka |
December 15, 2009, Tuesday
|
Print Edition
Print Edition
JAPANESE companies are gaining confidence in the global recovery, but an uncertain outlook at home is fueling a worrisome retreat in corporate spending, a key central bank report showed yesterday.
In the Bank of Japan's closely watched "tankan" quarterly survey of business sentiment, the main index for large manufacturers stood at minus 24, a 9 point improvement from three months ago. The figure represents the percentage of companies saying business conditions are good minus those saying conditions are unfavorable.
The result beat Kyodo news agency's average market forecast of minus 27 and reflects how robust Asian demand is bolstering the world's second-biggest economy. The fine print, however, paints a less encouraging picture.
Amid deflation and a strong yen, companies remain reluctant to invest in factories, equipment or workers.
Major manufacturers and non-manufacturers plan deeper capital spending cuts of 13.8 percent this fiscal year through March 2010, according to the tankan. They say they still have too many workers and capacity. And while big companies expect sentiment to improve next quarter, small and medium-size firms forecast deterioration amid a frail domestic economy.
"Strong Asian demand is driving the Japanese economy through exports, and larger manufacturers are to some extent benefiting from that," said Masayuki Kichikawa, chief economist at Bank of America Merrill Lynch in Tokyo. "But today's numbers confirmed a divergence in business sentiment."
In the Bank of Japan's closely watched "tankan" quarterly survey of business sentiment, the main index for large manufacturers stood at minus 24, a 9 point improvement from three months ago. The figure represents the percentage of companies saying business conditions are good minus those saying conditions are unfavorable.
The result beat Kyodo news agency's average market forecast of minus 27 and reflects how robust Asian demand is bolstering the world's second-biggest economy. The fine print, however, paints a less encouraging picture.
Amid deflation and a strong yen, companies remain reluctant to invest in factories, equipment or workers.
Major manufacturers and non-manufacturers plan deeper capital spending cuts of 13.8 percent this fiscal year through March 2010, according to the tankan. They say they still have too many workers and capacity. And while big companies expect sentiment to improve next quarter, small and medium-size firms forecast deterioration amid a frail domestic economy.
"Strong Asian demand is driving the Japanese economy through exports, and larger manufacturers are to some extent benefiting from that," said Masayuki Kichikawa, chief economist at Bank of America Merrill Lynch in Tokyo. "But today's numbers confirmed a divergence in business sentiment."
- About Us
- |
- Terms of Use
- |
-
RSS - |
- Privacy Policy
- |
- Contact Us
- |
- Shanghai Call Center: 962288
- |
- Tip-off hotline: 52920043
- 沪ICP证：沪ICP备05050403号-1
- |
- 互联网新闻信息服务许可证：31120180004
- |
- 网络视听许可证：0909346
- |
- 广播电视节目制作许可证：沪字第354号
- |
- 增值电信业务经营许可证：沪B2-20120012
Copyright © 1999- Shanghai Daily. All rights reserved.Preferably viewed with Internet Explorer 8 or newer browsers.
