TOKYO (Reuters) – Japanese business sentiment improved in July-September from a 11-year low hit three months ago, a key central bank survey showed, in a sign the economy is gradually emerging from the devastating hit from the coronavirus pandemic.
The data offers some hope for new Prime Minister Yoshihide Suga’s efforts to achieve an economic revival from the crisis and pave the way for hosting next year’s Tokyo Olympic Games.
But factory activity remained shaky and corporate capital expenditure plans were at their weakest since the 2009 global financial crisis, underscoring the challenge of pulling the world’s third-largest economy sustainably out of its slump.
As the pandemic’s pain persists, a ruling party heavyweight signalled Japan’s readiness to compile a “large-scale, bold” additional spending package.
The headline index for big manufacturers’ sentiment improved to minus 27 in September, off a 11-year low of minus 34 in June but worse than a median market forecast of minus 23, the Bank of Japan’s closely watched “tankan” survey showed on Thursday.
While it showed many firms remain downbeat, it was the first sign of improvement in nearly three years.
“The big manufacturers’ index turned out a little weaker than expected, reflecting an uneven recovery,” said Takeshi Minami, chief economist at Norinchukin Research Institute.
“Capital expenditure may weaken in coming months as companies put off non-urgent spending plans