Log in
Forgot password ?
Become a member for free
Sign up
Sign up
Dynamic quotes 

4-Traders Homepage  >  News


Latest NewsCompaniesMarketsEconomy & ForexCommoditiesInterest RatesHot NewsMost Read NewsRecomm.Business LeadersCalendar 

BOJ December Tankan Likely to Worsen Sharply

share with twitter share with LinkedIn share with facebook
share via e-mail
12/11/2012 | 01:56am CEST

--BOJ's December quarterly tankan is expected to show a sharp deterioration in sentiment among large manufacturers

--Impact of anti-Japan protests in China likely weighed on corporate sentiment

--Analysts expect BOJ to ease policy further if results as weak as expected

TOKYO--Japan's large manufacturers became significantly pessimistic about their business conditions in the three months to December as anti-Japan protests in China that heated up in September weighed on sentiment, the central bank's quarterly tankan survey is expected to show Friday.

The survey's headline diffusion index--which measures sentiment among large manufacturers--is expected to fall to minus 10 from minus 3 in the previous tankan in September, according to a median forecast of 16 economists. It would be the lowest reading since March 2010.

The index is calculated by subtracting the percentage of firms saying business conditions are bad from those saying they are good.

The expected deterioration is largely due to stalled business activities amid anti-Japan protests in China over a territorial dispute, as well as to the termination of government subsidies for fuel-efficient cars, analysts say.

The impact of the dispute wasn't fully reflected in the September tankan, as a majority of the companies responded to the survey before the outbreak of violent rallies in China in mid-September.

Many analysts expect that if the December tankan is as weak as expected, it will trigger another round of monetary loosening by the BOJ at its Dec. 19-20 meeting. The central bank is also feeling strong pressure from lawmakers, as monetary policy has become a major focal point in the campaign for Sunday's general elections.

"Since the BOJ doesn't want to be seen as bowing to political pressure, it will likely keep up appearances that a further deterioration in the economy, as indicated in the tankan, forces it to take additional easing steps," said Hideo Kumano, chief economist at Dai-Ichi Life Research Institute.

Shinzo Abe, leader of the main opposition Liberal Democratic Party widely seen as returning to power, has urged the BOJ to implement "unlimited" easing to target 2% rises in prices. His comments have fueled market hopes for immediate BOJ action, lifting the dollar to as high as Y82.84 on Nov. 22.

Meanwhile, the tankan is likely to show that big companies plan to increase capital spending by 4.9% in the current fiscal year ending March 31, according to the economists' forecast. That is down from a 6.4% rise forecast in the previous survey.

Although business spending plans are usually revised upward in December surveys, they will likely show cuts this time due to slowing production and sluggish corporate profit prospects, analysts say.

Write to Megumi Fujikawa at [email protected]

Subscribe to WSJ: http://online.wsj.com?mod=djnwires

share with twitter share with LinkedIn share with facebook
share via e-mail
Latest news
Date Title
07:25a See how slowdown plays out before deciding on rate hike - BoE's Cunliffe
07:24a AGC : Damovo First to Bring Avaya Cloud Solutions to Ireland
07:24a SAMSUNG ELECTRONICS : Set To Release The Galaxy Note7 FE Soon?
07:23a CASH SUVIDHA EMERGES AS A FINANCIAL LIFELINE FOR INDIAN ENTREPRENEURS : Entrepreneurs can apply for loans all 365 days from anywhere and anytime in India and get money within 72 hours*
07:21a BRITAM : Insurance revenues slump as hard times hit clients
07:19a ECLAC ECONOMIC COMMISSION FOR LATIN AMERICA AND : Regional Conference on Ageing Opens with a Call for Empowering and Raising the Visibility of Older Persons in Latin America and the Caribbean
07:17a PANERA BREAD : opens in Lebanon
07:17aDJNEWS HIGHLIGHTS : Top Global Markets News of the Day
07:17a RENAULT : Band members 'lucky to be alive'
Latest news
Hot News 
0.53%ECB's Draghi Hints at Possible Winding Down of Eurozone QE -- 5th Update
Most Read News
06/27 KAZUO OKADA : Family help oust Japan casino mogul Okada in boardroom coup
06/27 Oil prices weighed down as U.S. inventory gains revive glut worries
06/27 Google faces years of EU oversight on top of record antitrust fine
06/27 Toshiba faces shareholders with no chip unit deal signed
06/27 THOMSON RESOURCES : Further Outstanding Drill Results for Bygoo Tin
Most recommended articles
01:25a See how slowdown plays out before deciding on rate hike - BoE's Cunliffe
01:11a JAPAN TOBACCO : tries to catch up with rival in smokeless tobacco
01:09a Oil pipeline firms' discounts rile clients, roil markets
12:17aDJNEWS HIGHLIGHTS : Top Energy News of the Day