The closely-watched Bank of Japan Tankan Index survey has indicated positive signs for the Japanese economy which lifted businesses’ mood, according to The Nikkei.
Japanese companies have a more positive outlook: the index improved to minus 1 in June from minus 4 in March. The sentiment index is calculated by subtracting the percentage of companies reporting negative business conditions from positive ones. Companies forecast a profit climb of 10.1% compared to 0.6% in March.
The BoJ upgraded its assessment of the economy as it experienced a “moderate” pick-up. According to The Nikkei, the overall positive signs will likely take a little pressure off the bank to take further easing steps. However, with a strong yen, weak external demand and price data that fall short of the BoJ’s 1% inflation goal, analysts still expect the central bank to implement easy monetary policies.
Maiko Noguchi, a senior economist at Daiwa Securities, told The Nikkei, the Tankan was “positive as it shows that economic recovery is proceeding steadily”. The dollar stood at Y79.81, as of 0205 GMT Monday, The Nikkei reports. Large manufacturers expect the yen to weaken this fiscal year, predicting the dollar to average Y78.95 but remain strong.