Japan business mood edges up; quake impact looms-BOJ tankan

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TOKYO, April 1 (Reuters) – Japanese manufacturers’ business
sentiment improved slightly in the three months to March, the
Bank of Japan’s closely watched tankan survey showed, but
analysts anticipate a downturn in confidence this quarter
following last month’s devastating earthquake and tsunami and
subsequent nuclear crisis.

The headline index for big manufacturers’ sentiment was plus
6 in March, the survey showed on Friday, improving from plus 5
in December and against the median market forecast of plus 7.

But the survey did not fully reflect the impact of the
magnitude 9.0 earthquake and tsunami that flattened coastal
towns and cities in the country’s northeast, killed more than
11,000 and triggered the world’s worst atomic crisis in 25
years, because the BOJ had collected most firms’ responses
before the quake.

The index for June was seen at plus 2, showing that
companies expect business conditions to worsen over the next
three months .

The survey also showed that big firms plan to cut their
capital spending by 0.4 percent in the financial year to next
March, compared with the market’s median forecast for a 1.8
percent increase.

The sentiment indexes are derived by subtracting the
percentage of respondents who say conditions are poor from those
who say they are good. Negative readings mean pessimists
outnumber optimists.

(Reporting by Rie Ishiguro, Leika Kihara; Editing by Chris
Gallagher)

Japan business mood edges up; quake impact looms-BOJ tankan