Japan's big-firm business sentiment recovers in Apr.-June qtr+

TOKYO, June 22 Kyodo -
Business sentiment among large Japanese firms improved in the April-June
quarter from the first three months of 2009 at a fast pace, helped by signs of
improvement in overseas demand, a government survey showed Monday.
Despite the improvement, it is the sixth straight quarter that the
industry-wide index has stayed in negative territory. That is the longest bad
streak since the survey was first conducted under the current format in the
April-June quarter of 2004.
The index of business conditions at companies capitalized at 1 billion yen or
more came to minus 22.4 on an all-industry basis, against a record low of minus
51.3 in the January-March quarter, according to the survey carried out by the
Cabinet Office and the Finance Ministry.
The index is calculated every three months by subtracting the percentage of
firms reporting deteriorating business conditions from that of firms reporting
improvement.
Business confidence among large companies is projected to improve further in
the months ahead. The confidence index stands at minus 2.6 in the
July-September quarter and plus 8.7 in the October-December period.
For large manufacturers, the index reads plus 4.8 for the July-September quarter.
In the April-June period, the index for big manufacturers stood at minus 13.2
against an all-time low of minus 66.0 the previous quarter, as the business
climate for automakers as well as chemical and high-tech companies brightened
due to stronger demand for their products, especially from China, a Finance
Ministry official said.
The index for large nonmanufacturers was minus 27.8, up from minus 42.6.
The latest results increased hope that the Bank of Japan's next Tankan business
sentiment survey, due out July 1, will show a similar improvement from the
January-March period's worst-ever outcome.
Economists have projected that the central bank's quarterly survey, Japan's
most closely watched gauge of corporate sentiment, will show the first
improvement in business confidence among big manufacturers in two-and-a-half
years.
Nevertheless, the latest government survey reaffirmed that employment
conditions are likely to remain poor for some time.
The index for the job environment at large companies in all industries was
minus 11.7 for the April-June period, down from minus 11.2 in the previous
survey. The index for nonmanufacturers fell to minus 4.0 from plus 1.2.
But the employment index for manufacturers improved slightly to minus 25.1 from
minus 31.9. Readings in the minus column mean companies face a labor surplus.
The government survey also showed firms in all industries estimate a 17.7
percent cut in capital investment in the first six months of fiscal 2009 from
the same period the year before and a 21.1 percent drop in the latter half
through the end of March next year.
The estimates were better than a 27.7 percent decline and a 31.0 percent
contraction projected, respectively, in the previous survey.
Manufacturers plan to spend 26.6 percent less in the first half of the current
fiscal year and 30.9 percent less in the second half compared with the
respective periods the previous year.
Meanwhile, companies of all sizes forecast a 52 percent plunge from a year
earlier in their pretax profits in the first six months of this fiscal year.
But they anticipate an 81.3 percent jump in pretax profits in the latter half.
The survey, conducted May 25, covered 14,964 companies, of which 11,763, or
78.6 percent, responded.
==Kyodo
2009-06-22 22:41:17