The Bank of Japan's (BoJ) business sentiment survey, known as the
Tankan, showed on Monday that the sentiment of Japan’s big manufacturers
worsened slightly over the first quarter of 2024.
According to the survey, the headline index for large manufacturers'
sentiment fell to +11 in the three months to March from the previous quarter's
reading of +13 (revised from originally reported +12). This marked the first
decrease in the indicator in four quarters but was marginally better than
economists’ prediction of +10. The decline was driven by manufacturers of motor
vehicles (-15 points to +13 in the March quarter), nonferrous metals (-9 points
to +6), and business-oriented machinery (-6 points to +16). On the contrary, producers
of petroleum and coal products (+9 points to +9), shipbuilding and heavy
machinery (+9 points to +18), ceramics, stone and Clay (+7 points to +29), and food
and beverages (+6 points to +24) demonstrated the strongest improvements in confidence
last quarter.
Meanwhile, sentiment among big companies in the non-manufacturing sector
rose to +34 in the first quarter from +32 in the previous quarter (revised from
+30). Economists had forecast the Tankan large non-manufacturing index to come
in at 33.
The survey also revealed that both big manufacturers and non-manufacturers
see business conditions to deteriorate in the second quarter. The large manufacturers’
outlook index came in at +10 and that of the large non-manufacturers at +27.