BOJ’s Tankan survey slips

April 3, 2007
By Ken Worsley

Released yesterday, the Bank of Japan’s quarterly Tankan survey showed that confidence at the nation’s large manufacturers declined over the previous quarter. The index’s score slipped from 25 in December to 23 in March, showing its first drop in a year.

The 23 score means that those firms who think business conditions are favorable outnumbered those who think they are negative by 23 percentage points. Many economists ad predicted a slight fall, usually in the 24 point area.

This announcement supports the view that the BOJ will not be able to raise interest rates again just yet, although such a move would be difficult with Upper House elections coming in July.

It seems that large manufacturers seem most worried about a slowdown in the US economy, as the US remains the largest consumer of Japanese exports. A slowdown there could be sharply felt across the economy, as exports have slowing been making up more and more of Japan’s GDP as the economy has picked up steam.

Filed Under Bank of Japan, Economic Reports, Tankan