Japanese business sentiment improved unexpectedly in September even as firms struggled under the weight of the recent sales tax increase, the Bank of Japan's tankan survey showed today, Market Watch reported.
The quarterly poll of more than 10,000 companies offered the latest snapshot of how Japanese firms were facing up to bigger than expected challenges from the government's move to raise the sales tax rate to 8 per cent from 5 per cent in April.
The key index measuring what Japan's big manufacturers thought of present economic conditions came in at plus 13 in the September survey, up from plus 12 in the June poll.
According to Hideo Kumano, executive chief economist at Dai-Inchi- Life Research Institute, it was a surprise. However, rather than saying that the economy was picking up it was fair to say that the downturn was coming to a halt.
He added, public works spending that came into play and a weakening of the yen since September were seen as factors supporting sentiment.
The reading handsomely beat a reading of plus 10 projected by economists surveyed by The Wall Street Journal. the report lists the following takeaways from the survey:
- Manufacturers' mood unexpectedly up
- Non-manufacturers less upbeat
- Workers in short supply
- Yen exchange rate windfall
- Profit forecasts improving