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Business confidence continues to improve – Bank of Japan
October 1, 2013, 5:51 am

Archive photo showing the Nikkei registering growth. The Tankan report on Tuesday was welcome news to the local economy [Xinhua]

The Tankan report on October 1, 2013 was welcome news to the local economy [Xinhua archive photo]

The Bank of Japan announced that confidence in the country’s large manufacturers has increased for the third consecutive quarter of 2013.

The Bank’s Tankan survey report said that the positive outlook in Japan’s industry surpassed expert forecasts; it reached +12 on the sentiment index used to measure business confidence.

The index for large non-manufacturers stood at plus 14, up from plus 12 in June.

The report appeared to alleviate some of the bad news coming from Wall Street as the US prepares for a government shutdown due to partisan disagreements on a temporary spending budget.

Japan’s Nikkei Index jumped 0.6 per cent from yesterday’s close.

The report is sure to also inject some confidence in Prime Minister Shinzo Abe’s embattled economic policies.

In July, the Ministry of Finance showed that the country had registered a record-setting trade deficit in the first half of the year.

During the January-June period, imports grew by 9. 2 per cent on year to 38,801.2 billion yen ($389.147 billion) while exports rose 4.2 per cent to 33,957.4 billion yen ($340.5 billion) – a trade deficit of 4.8 trillion yen ($48 billion).

Some blame the 2011 Fukushima nuclear crisis which forced the country to turn from nuclear power to more expensive fossil-fuel alternatives for much of the deficit; some 90 per cent of Japan’s energy supplies come from imports.

Abe, meanwhile, is using the positive feeling in the local economy to push ahead with plans to increase taxes from 5 to 8 per cent in April 2014.

Source: Agencies