Japanese business confidence hits 11-year high

Tokyo: Confidence among Japan’s biggest manufacturers is at an 11-year high, a key central bank survey showed on Friday, as the world’s number-three economy picks up pace. The bullish survey underscored how Japan’s prospects have been improving on the back of strong exports, with investments linked to the Tokyo 2020 Olympics also giving the economy a shot in the arm.
The Bank of Japan’s (BoJ) Tankan report, a quarterly survey of more than 10,000 companies, showed a reading of 25 among major manufacturers in its December survey, the highest since its December 2006 poll.
The mood among major manufacturers has now risen for a fifth straight quarter.
The report, seen as the broadest indicator of Japan Inc’s health, marks the difference between the percentage of firms that are upbeat and those that see conditions as unfavourable.
Buoyed by a favourable outlook, the firms say they plan on average to boost capital spending by 10.2 per cent year-on-year, according to the survey.
“The strong reading reflects major manufacturers’ sound performance, thanks to brisk demand in the global economy,” Tsuyoshi Ueno, economist at NLI Research Institute, said.
However, he also noted that firms “remain cautious about various risks including geopolitical concerns over North Korea and the Middle East”. The index for non-manufacturers came in at 23, unchanged from the previous survey in October.
This was the highest level since the final quarter of 2015.
The report is a boost for Prime Minister Shinzo Abe, who swept to power in late 2012 on a pledge to cement a lasting recovery in the once booming economy with a growth plan dubbed Abenomics.
 — AFP