Large Japanese manufacturers are becoming less optimistic about their business outlook, a quarterly survey by the Bank of Japan said yesterday, underlying growing worries about the fragility of the nation's recovery.
However, in a bit of bright news in the central bank's survey, known as the tankan, the manufacturers still said they plan to increase capital spending.
The index of sentiments about business conditions among large manufacturers fell 8 points to 14 in March, from 22 in the December survey. Economists surveyed by Dow Jones Newswires on average had forecast an index of 22 for March.
PHOTO: AFP
The tankan indexes measure the percentage of companies saying business conditions are better minus the percentage saying things are worse.
The March result also is slightly worse than the large manufacturers' forecast in the previous tankan. In December, they said they expected the sentiment index to drop 7 points to 15 by March.
The companies are less optimistic following a string of weak economic indicators in Japan recently. Government officials have played down such signs, reassuring the public that the world's second largest economy continues to be on a rebound.
"While in an adjustment phase, the economy continues its recovery and the tankan overall backs up that view," Economy Minister Heizo Takenaka said.
Some analysts agreed with that view.
"The figures are weaker than expected across the board but these are still positive numbers," Peter Morgan, chief economist at HSBC in Tokyo, told Dow Jones Newswires.
The data are "still consistent with some moderate expansion" but there is no sign of a pickup in the pace of that expansion, he said.
The government spokesman said the economy won't head downward.
"The outlook is different depending on a type of business, but we think the economy is basically leveling off," Chief Cabinet Secretary Hiroyuki Hososa said.
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