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Japan Tankan survey shows business sentiment worsening | Japan Tankan survey shows business sentiment worsening |
(35 minutes later) | |
Sentiment among Japanese businesses worsened in the three months to December, the Bank of Japan's Tankan survey has indicated, underlining the weakness in the country's economy. | Sentiment among Japanese businesses worsened in the three months to December, the Bank of Japan's Tankan survey has indicated, underlining the weakness in the country's economy. |
The survey's large manufacturers' index deteriorated to minus 12, from minus three in the previous quarter. | The survey's large manufacturers' index deteriorated to minus 12, from minus three in the previous quarter. |
Japanese manufacturers have been hurt by slowing export demand, a strong yen and subdued domestic consumption. | Japanese manufacturers have been hurt by slowing export demand, a strong yen and subdued domestic consumption. |
The index plays a role in driving the central bank's monetary policy. | The index plays a role in driving the central bank's monetary policy. |
"We can see sentiment is worsening across the board, whether in manufacturing or services," said Hiroshi Miyazaki, chief economist at Shinkin Asset Management in Tokyo. | "We can see sentiment is worsening across the board, whether in manufacturing or services," said Hiroshi Miyazaki, chief economist at Shinkin Asset Management in Tokyo. |
"There are not any signs that sentiment will recover quickly," he added. | |
Stimulus boost? | |
The index, which measures sentiment among large manufacturers, has remained negative for five successive quarters. | The index, which measures sentiment among large manufacturers, has remained negative for five successive quarters. |
The latest number comes after revised growth figures earlier this week suggested the world's third-largest economy was in recession. | |
Japan said its economy shrank by 0.9% between July and September. | |
At the same time, the April to June quarter was revised from 0.1% growth to show a contraction of 0.03%, making it two successive quarters of contraction, or a technical recession. | |
A shrinking economy, slowing demand for exports and sluggish domestic consumption have all contributed to calls for policymakers to implement new measures to help revive growth. | |
Japan has unveiled some initiatives, including a stimulus boost worth 880bn yen ($10.7bn; £6.7bn), announced last month, to create employment and support small businesses. | |
However, there have been calls for the central bank to ease its policies further. Analysts said given the sharp decline in sentiment, the bank may announce some measures soon. | |
"If the Bank of Japan was leaning toward easing policy, this Tankan survey will give them a nudge in that direction," said Mr Miyazaki. |
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