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BOJ survey likely to show improved business sentiment

  • June 24, 2021
  • , Jiji Press , 5:48 p.m.
  • English Press

Tokyo, June 24 (Jiji Press)–The Bank of Japan’s upcoming “tankan” quarterly report is expected to show an improvement in business sentiment among large manufacturers, thanks to the global economic recovery from the COVID-19 pandemic, according to think tanks.

 

The June survey, due out July 1, is expected to show the headline diffusion index for sentiment among large manufacturers at plus 15 on average, up 10 points from the previous March report, according to a Jiji Press survey of 16 private think tanks.

 

The DI represents the percentage of companies reporting that their business conditions are good minus that of those saying the opposite.

 

Think tanks pointed to a pickup in global trade, backed by progress in COVID-19 vaccine rollouts.

 

“Exports and production are solid on the recovery of the global economy, mainly the Chinese and U.S. economies,” Mitsubishi Research Institute Inc. <3636> said.

 

The DI for large nonmanufacturers’ sentiment is forecast at plus 3 on average, up from minus 1 in March and its first positive reading since March 2020. But the pace of improvement is slower compared with manufacturers, according to think tanks.

 

The information services sector is expected to see an improvement thanks to increased software investments.

 

But “restaurants, bars, hotels and other businesses offering in-person services faced another headwind” after the government declared a COVID-19 state of emergency again, NLI Research Institute said.

 

All think tanks predict nonmanufacturers’ sentiment to improve further in the months to come thanks to accelerated vaccine rollouts.

 

Manufacturers are expected to see the pace of recovery in sentiment slow down due to the shortage of semiconductors, according to think tanks.

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