TOKYO (Reuters) - Big Japanese manufacturers turned less pessimistic about business conditions in April-June, a survey showed on Monday, as accelerating private consumption and reconstruction after last year’s massive earthquake and tsunami fuelled economic growth.
The data suggests the Bank of Japan’s closely watched tankan sentiment survey, due on July 2, will also show sentiment is improving.
Still, the central bank is likely to remain under pressure to offer additional monetary stimulus in the coming months as Europe’s sovereign debt crisis and a stubbornly high yen weigh on exporters’ earnings.
“Corporate sentiment showed subdued improvement as reconstruction demand so far is limited, while there are uncertainties about the world economy and the yen’s rise,” said Takeshi Minami, chief economist at Norinchukin Research Institute in Tokyo.
“Policymakers in Europe are likely to prevent a financial crunch but what they’re doing are only short-term fixes, not fundamental remedies, so there may arise various problems one after another.”
The business survey index (BSI) of sentiment at large manufacturers stood at -5.7 in April-June, compared with -7.3 in January-March, a joint survey by the Ministry of Finance and the Economic and Social Research Institute, an arm of the Cabinet Office, showed on Monday.
Big firms expect capital spending to increase 8.4 percent in the year ending in March 2013, against a forecast of a 0.3 percent decrease in the previous survey, boding well for the outlook of the fragile recovery.
The BSI measures the percentage of firms that expect the business environment to improve from the previous quarter, minus the percentage that expect it to worsen.
Japan’s economy is headed for a moderate recovery as rebuilding from the March 2011 earthquake and tsunami gets into full swing, and government subsidies for low-emission vehicles support demand for automobiles.
Reporting by Stanley White; Editing by Joseph Radford and Paul Tait