Business confidence among major Japanese manufacturers weakened in the first quarter and will further deteriorate over the next three months. This is indicated by the results of the three-month Tankan survey of the Bank of Japan, published today and quoted by DPA.

The main index of business confidence for major manufacturers fell to 11 points in the quarter to March from 13 points in the previous quarter. This is the first decline in a year. However, the result was slightly above economists' forecast of 10 points.

The indicator for the prospects for large producers was 10 points, which is below the expected 11 points. 

Business confidence after large non-productive companies rose to 34 points in the first quarter from 32 points in the previous period. 

The survey also shows that large companies plan to increase their investment capital by 4 percent in the 2024 tax year. However, it is well below the expected growth of 11.5 percent in the previous tax year. 

Over 60 percent of Japanese people are under financial stress

The employment conditions index fell to -36 points in the first quarter from -35 points a year ago. The indicator shows a serious labor shortage.

The Tankan survey signals that a quick recovery from the likely decline in gross domestic product (GDP) looks unlikely, said Capital Economics economist Gabriel Ng.

Meanwhile, data from the Standard & Poor's Global (S&P Global) survey of supply managers, published today, indicated that manufacturing activity in Japan contracted for the 10th consecutive month, BTA notes. 

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