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173013
Mon, 04/04/2011 - 19:16
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Quake casts doubt over business outlook: special Tankan
TOKYO, April 4 Kyodo -
The devastating March 11 earthquake and tsunami have deteriorated the business outlook for Japanese firms, the Bank of Japan said Monday, releasing in a rare move separate data from its closely watched Tankan survey, made public last week.
The data added to widespread concerns that the world's third-biggest economy would fall amid the impact of the disaster, which crippled manufacturers and a nuclear power plant while causing serious power supply shortages and sparking fears of food contamination from radiation.
The BOJ released the special reference result of the quarterly survey, showing two parts of the diffusion index of business conditions for companies responding to the poll before and after the earthquake. This marked the outlook index for large manufacturers reporting after the quake at minus 2, 4 points lower than the comparable reading released Friday.
The index represents the forecast of the business environment in June. As for those who responded before the disaster, it was plus 3.
The central bank released the results of the March Tankan on Friday, underlining a slight improvement in confidence among big manufacturers with another index rising to plus 6 from December's plus 5.
But economists said the data had little value as an accurate source of information because the BOJ mixed responses both from before and after the natural disasters.
This has led the bank to release the breakdown of the March result, although the BOJ said it may not necessarily be appropriate to compare the two groups because the number of companies who responded after the quake -- 23.6 percent of the total -- is much smaller than those who submitted their replies earlier, 72.0 percent.
Still, analysts say the special Tankan is not sufficient to help clarify the adverse effect on the economy of the disasters.
''The magnitude of deterioration for the post-quake indexes appears to be too small compared to what we are hearing on the impacts from supply chain disruption, power outage, and nuclear plant accidents,'' Masamichi Adachi, senior economist at JPMorgan Securities Japan Co., said.
''There should be firms who did not fully recognize the situation when they filled the survey forms,'' said Adachi, adding, ''Today's reading is probably not so reliable to gauge the impact of the disaster.''
Fueling such a view, some of the readings released Monday made an overall assessment difficult.
On conditions in March, the post-quake index stood at plus 6 for large manufacturers, slightly lower than the pre-quake reading of plus 7. For major nonmanufacturers, however, the post-quake index came to plus 7, much stronger than the pre-quake index of plus 1.
Some economists say the most probable reason for the odd results is that many companies had already filled out the question forms before the quake but submitted them to the BOJ after the disaster without changing their views.
The breakdown figures also showed that the outlook index of small and medium-sized companies in all industries stood at minus 25 after the quake and minus 22 before it, compared with Friday's reading of minus 23.
The diffusion index represents the percentage of companies reporting favorable business conditions minus the percentage reporting an unfavorable environment.
The BOJ will hold a two-day monetary policy meeting starting Wednesday, with market participants shifting their focus on whether the bank would further ease its policy to help financial institutions in the quake-hit areas raise funds for their operations.
''We cannot say this Tankan will lead to a policy change'' by the BOJ, economists at Nomura Securities Co. said in a report, but added, ''It is inevitable the BOJ will downgrade its economic assessment'' due to the quake.