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Business Insight

Corporate Sentiment up

The Bank of Japan has released data that indicates Japanese companies are getting more optimistic. Indexes of business confidence in the Bank's quarterly survey improved for the first time in 3 quarters, reaching the highest level in over a year.

The Short Term Economic Survey of Enterprises in Japan, which is also known as the Tankan, measures overall corporate sentiment by taking the number of companies that say business conditions are positive, and subtracting the number saying they are negative. The latest survey covered over 11,000 firms.

The index at major manufacturers for June came in at a positive 15. That's up 3 points from the previous survey released at the beginning of April. Observers say robust corporate earnings have many companies feeling positive about capital investment.

Confidence has also improved at major non-manufacturers. Their index came in at a positive 23, up 4 points from the previous quarter. It's also the highest level since March 2014, when personal consumption surged before a sales tax hike went into effect.

Analysts say more companies are raising wages, kick starting the recovery in personal consumption. Spending by foreign tourists is another factor behind the improvement.

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