ID :
22304
Thu, 10/02/2008 - 09:38
Auther :
Shortlink :
https://oananews.org//node/22304
The shortlink copeid
Big makers' sentiment sinks to minus side for 1st time in over 5 years
TOKYO, Oct. 1 Kyodo - Business confidence among Japan's major manufacturers deteriorated in the three months through September from the previous quarter, with the index falling into negative territory for the first time in more than five years, the Bank of Japan said Wednesday.
Apparently reflecting a slowdown in the Japanese economy amid the global
financial chaos, the central bank's closely watched Tankan survey showed the
index of big maker's sentiment, a key indicator of Japanese business trends,
came to minus 3.
The figure represented a fall from 5 recorded in the previous survey for the
fourth straight quarter of decline and was the lowest since June 2003, when the
index stood at minus 5. It is also slightly below the average market forecast
of minus 2 in a Kyodo News survey.
The diffusion index represents the percentage of companies reporting favorable
business conditions minus that of firms describing an unfavorable environment.
The index for major nonmanufacturers' confidence stood at 1, down from 10
recorded in the earlier three months for the fifth straight quarterly decline
and the lowest since December 2003, when it was at zero.
The BOJ survey came as Japanese authorities have admitted that the economy
falters on weaker exports amid uncertainty about the prospects of the U.S. and
other major economies given the global credit crisis.
Chief Cabinet Secretary Takeo Kawamura expressed concern that the results
reflect uncertainty about Japan's economic outlook. ''We must closely watch any
developments in the future,'' the government's top spokesman added.
Confidence among small manufacturers also weakened, with the index falling 7
points to minus 17 and that for their nonmanufacturing counterparts down 4
points to minus 24, suggesting higher oil and material costs hurt the balance
sheets of smaller firms.
The BOJ conducted the survey between Aug. 27 and Sept. 30, covering 10,488
companies, amid the upheavals involving major U.S. financial institutions
including the bankruptcy of Lehman Brothers Holdings Inc. on Sept. 15.
While 98.9 percent of the firms responded, many of them seem to have replied
before the crisis emerged fully, and analysts point out that the basic trend
could be worse than the result shows.
The latest Tankan ''backs the view that Japan's economy has surely entered a
recession phase,'' Masaaki Kanno, chief economist at JPMorgan Securities in
Japan, said.
Izuru Kato, chief economist at Totan Research Co., said, ''Falls in crude oil
prices in recent weeks have somehow improved companies' terms of trade.
However, there is the risk that the financial crisis in the United States could
continue to push Japanese firms in a downward spiral.''
With banks increasingly cautious about extending fresh loans to businesses on
fear of defaults amid the global economic stress, a growing number of
companies, both large and small, said in the survey that they have faced
difficulty raising operating funds.
The indexes gauging the ease with which they feel they can borrow money from
banks fell 4 points to 13 in terms of big companies and 5 points to minus 3 in
terms of small firms.
Meanwhile, the index of financial institutions' business confidence lost 12
points to minus 1, the lowest level since the BOJ began the Tankan survey in
the current way in December 2003.
Among large manufacturers, machinery, precision instrument and nonferrous metal
industries logged major falls in their sentiment while information services,
real estate and utility sectors marked a sharp deterioration among
nonmanufacturers.
Large manufacturers forecast a 10.4 percent fall in their pretax profit for
fiscal 2008 and major nonmanufacturers expected an 8.4 percent decline -- both
for the first fall in seven years.
For the next three months through December, the index for large manufacturers
is expected to further deteriorate to minus 4 and that for nonmanufacturers to
minus 1, the central bank said.
Confidence among smaller companies is also projected to fall deeper into
negative territory.
The survey found that big companies plan to boost their capital spending 1.7
percent in the current fiscal year through March from the previous year.
Big manufacturers are to raise investment in such areas as plant and equipment
by 5.6 percent and large nonmanufacturers are looking to cut spending 0.7
percent.
Capital spending on the part of small companies in all industries is forecast
to decline 12.9 percent.
kYODO
Apparently reflecting a slowdown in the Japanese economy amid the global
financial chaos, the central bank's closely watched Tankan survey showed the
index of big maker's sentiment, a key indicator of Japanese business trends,
came to minus 3.
The figure represented a fall from 5 recorded in the previous survey for the
fourth straight quarter of decline and was the lowest since June 2003, when the
index stood at minus 5. It is also slightly below the average market forecast
of minus 2 in a Kyodo News survey.
The diffusion index represents the percentage of companies reporting favorable
business conditions minus that of firms describing an unfavorable environment.
The index for major nonmanufacturers' confidence stood at 1, down from 10
recorded in the earlier three months for the fifth straight quarterly decline
and the lowest since December 2003, when it was at zero.
The BOJ survey came as Japanese authorities have admitted that the economy
falters on weaker exports amid uncertainty about the prospects of the U.S. and
other major economies given the global credit crisis.
Chief Cabinet Secretary Takeo Kawamura expressed concern that the results
reflect uncertainty about Japan's economic outlook. ''We must closely watch any
developments in the future,'' the government's top spokesman added.
Confidence among small manufacturers also weakened, with the index falling 7
points to minus 17 and that for their nonmanufacturing counterparts down 4
points to minus 24, suggesting higher oil and material costs hurt the balance
sheets of smaller firms.
The BOJ conducted the survey between Aug. 27 and Sept. 30, covering 10,488
companies, amid the upheavals involving major U.S. financial institutions
including the bankruptcy of Lehman Brothers Holdings Inc. on Sept. 15.
While 98.9 percent of the firms responded, many of them seem to have replied
before the crisis emerged fully, and analysts point out that the basic trend
could be worse than the result shows.
The latest Tankan ''backs the view that Japan's economy has surely entered a
recession phase,'' Masaaki Kanno, chief economist at JPMorgan Securities in
Japan, said.
Izuru Kato, chief economist at Totan Research Co., said, ''Falls in crude oil
prices in recent weeks have somehow improved companies' terms of trade.
However, there is the risk that the financial crisis in the United States could
continue to push Japanese firms in a downward spiral.''
With banks increasingly cautious about extending fresh loans to businesses on
fear of defaults amid the global economic stress, a growing number of
companies, both large and small, said in the survey that they have faced
difficulty raising operating funds.
The indexes gauging the ease with which they feel they can borrow money from
banks fell 4 points to 13 in terms of big companies and 5 points to minus 3 in
terms of small firms.
Meanwhile, the index of financial institutions' business confidence lost 12
points to minus 1, the lowest level since the BOJ began the Tankan survey in
the current way in December 2003.
Among large manufacturers, machinery, precision instrument and nonferrous metal
industries logged major falls in their sentiment while information services,
real estate and utility sectors marked a sharp deterioration among
nonmanufacturers.
Large manufacturers forecast a 10.4 percent fall in their pretax profit for
fiscal 2008 and major nonmanufacturers expected an 8.4 percent decline -- both
for the first fall in seven years.
For the next three months through December, the index for large manufacturers
is expected to further deteriorate to minus 4 and that for nonmanufacturers to
minus 1, the central bank said.
Confidence among smaller companies is also projected to fall deeper into
negative territory.
The survey found that big companies plan to boost their capital spending 1.7
percent in the current fiscal year through March from the previous year.
Big manufacturers are to raise investment in such areas as plant and equipment
by 5.6 percent and large nonmanufacturers are looking to cut spending 0.7
percent.
Capital spending on the part of small companies in all industries is forecast
to decline 12.9 percent.
kYODO
