Japan 'tankan' business survey shows optimism over recovery

A quarterly survey by Bank of Japan shows business sentiment has improved sharply with expectations that ecomy is recovering from a year-long recession.

BOJ’s “tankan” released Monday reported rebounds in all categories, both manufacturing and n-manufacturing companies, large and small. It was a marked improvement from past several quarterly reports as Japan battled coronavirus pandemic.

main measure of business conditions of large manufacturers rose to minus 10 from minus 27, while business sentiment among large n-manufacturers such as service industries rose to minus 5 from minus 12. actual results were better than forecast.

tankan measures corporate sentiment by subtracting number of companies saying business conditions are negative from those responding y are positive.

In summer, sentiment plunged to its lowest level in more than a dece as pandemic crushed exports and tourism, mainstays for world’s third-largest ecomy.

October's report showed first improvement in three years after six straight quarters of decline to an 11-year low.

Japan’s ecomy expanded at a 22.9% annual rate in last quarter, as businesses and personal spending recovered from pandemic-related shocks in spring and early summer that worsened a recession that started in late 2019, even before coronavirus outbreaks hit.

As is true for most major ecomies, setback dealt by pandemic has left Japan still at a lower level of ecomic output, 3.9% below level of last quarter of 2019, according to Capital Ecomics.

“ survey bolsters our view that Japan will recover quickly once third wave of coronavirus is brought back under control, with output likely to be back at pre-virus levels in mid-2021," said Capital Ecomics' Japan ecomist, Tom Learmouth.

(Im: AP)