Japan: Tankan survey showed some improvements in the sentiment of manufacturers - Rabobank

The Japanese Tankan survey showed some improvements in the sentiment of manufacturers, while the non-manufacturing index remained flat in the fourth quarter as noted by the Bas van Geffen, Quantitative Analyst at Rabobank.

Key Quotes

“These developments in the Tankan survey were largely as expected. Sentiment, especially amongst large manufacturers, improved on the back of a weaker yen. At the same time, Japanese companies proved more cautious when it comes to investment spending plans. The large industrials indicated that they expect to increase capital expenditures on average by 5.5% this fiscal year, which is a significant downgrade from the 6.3% in the Q3 survey – although there may be some seasonal factors at play here.”

“Meanwhile, the weaker yen has not really helped the smaller businesses in the same way as it has the big exporters, and smaller companies clearly remain less optimistic. Relying more on the Japanese domestic economy, smaller businesses are still feeling pressure from weak domestic demand.”