Japan's big firm sentiment improves for 2nd straight quarter

17:07, September 09, 2010      

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Business confidence among large Japanese firms improved in the July-September quarter from the previous quarter, the government said in a report on Thursday.

The index of business sentiment at companies capitalized at 1 billion yen or more rose to 7.1 from 4.0 in the April-June period, the survey jointly conducted by the Finance Ministry and the Cabinet Office showed.

The headline index was the second consecutive positive figure following 4.0 logged in the second quarter, which showed the first positive number in three quarters.

Sentiment among small and medium-sized firms also improved to minus 21.4 from minus 32.0.

The quarterly government survey subtracts the percentage of companies reporting deteriorating business conditions from the percentage of those reporting an improvement. A positive figure indicates the majority of firms see butter business conditions.

The government survey also revealed that companies are predicting economic conditions to deteriorate in the near future with the index measuring companies' sentiment on the outlook standing at 0.1 for the October-December quarter and 3.9 for the January-March period.

Companies will increase their capital spending by 8.7 percent, however, the survey showed, in the current fiscal year ending March 31, 2011 from a year before, although the increase is slower than the 9.2 percent rise projected in the previous survey.

In addition, the survey showed that companies expect their combined capital spending, excluding software and land, to increase 8.4 percent in fiscal 2010, down from 9.7 percent forecast in the previous survey.

Both ministries conducted the joint survey on Aug. 15, which includes 15,489 large companies, of which 12,176 replied.



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