Log in
Login
Password
Remember
Lost password
Become a member for free
Sign up
Sign up
Settings
Settings
Dynamic quotes 

4-Traders Homepage  >  News

News

Latest NewsCompaniesMarketsEconomy & ForexCommoditiesHot NewsMost Read NewsRecomm.Business LeadersVideosCalendar 

BOJ December Tankan Likely to Worsen Sharply

12/10/2012 | 07:56pm US/Eastern

--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 megumi.fujikawa@dowjones.com

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

React to this article
Latest news
Date Title
09:19aDJMARKET SNAPSHOT : Wall Street Braces For Losses As Dow Futures Tumble
09:19a AUDI : Second row for Audi at the Nürburgring
09:18a AEROHIVE NETWORKS : Change in Directors or Principal Officers, Regulation FD Disclosure, Financial Statements and Exhibits (form 8-K)
09:18a MANCHESTER UNITED : Van Gaal in Dark over De Gea Future
09:18a AMERICAN SUPERCONDUCTOR : DE/ : Entry into a Material Definitive Agreement (form 8-K)
09:18a SINO AGRO FOOD : Mr. Fredrik Danielsson to Join the Sino Agro Food Board of Directors and Decision Made to Increase the Pace of Structural Changes
09:18a RESEARCH AND MARKETS : Streaming Media Devices Market Study 2015: Adoption Trends, Purchase Patterns, and Use
09:17a GIGAMON : Teams with RSA
09:17a BOLZONI : 31 August 2015 - Disclosure regarding the plan for the purchase of own shares
09:17a ESMA EUROPEAN SECURITIES AND MARKETS AUTHORITY : Consultation Paper on Draft implementing technical standards under MiFID II
Latest news
Advertisement
Hot News 
ANALYTIK JENA : Celebrates Its 25-Year Anniversary with a Ceremony in the New Weimar Hall (A Quarter of a Century)
Universal Stainless Announces Schedule of Upcoming Investor Conference Presentations
MEREDITH : StyleHaul Names Dick Porter as Chief Revenue Officer
BW OFFSHORE : Mandatory notification of trade
KANGDA ENVRNMNTL : 【31.08.2015】Announcements and Notices - VOLUNTARY ANNOUNCEMENT – INCREASE IN
Most Read News
08/30 Suzuki Motor says it will buy back VW stake as court settles feud
08/30 Politicians welcome Berri's call for dialogue
02:39a Cortendo Announces Filing of Registration Statement for Proposed Initial Public Offering
08/30 DATACENTRIX : Forward-thinking Western Cape government wins OpenText "Big Think" award
08/30 Tezzaron Announces World’s First Eight-Layer Active Wafer Stack
Most recommended articles
09:17aDJBRISTOL MYERS SQUIBB : -Myers Granted Right to Buy Promedior for up to $1.25 Billion
09:15aDJGoogle, Sanofi Join Forces on Diabetes Monitoring, Treatment
09:08a No 'viable' alternative to QE seen for the ECB
09:06a Toshiba scandal continues as more accounting errors found
09:04a No room for manoeuvre on interest rates for Greece, Merkel says