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TOKYO (Reuters) – Sentiment among major Japanese manufacturers has improved to pre-pandemic levels in the first quarter, with companies planning to increase capital spending this year, suggesting the economy dependent on exports benefited from a strong recovery in global demand.
Confidence among large non-manufacturers also recovered three months ago, highlighting the disappearance of strains of the coronavirus pandemic, a central bank investigation showed on Thursday.
The Global Major Manufacturers’ Sentiment Index rose to plus 5 in March from minus 10 in December, the Bank of Japan’s closely watched tankan survey showed, marking the third consecutive quarter of improvement and reaching the most high level since September 2019.
He compared the market forecast from a flat reading.
The data offers some relief to policymakers struggling to revitalize the pandemic-stricken economy, as a fourth wave of infections raises uncertainty about the outlook.
The sentiment of large non-manufacturers improved to minus 1 in the March survey from minus 5 in December, according to the survey.
Large companies expect to increase their capital spending by 3.0% in the year that began in April, compared to a median forecast of a 1.4% increase, according to the survey.
Like many countries, Japan has deployed massive monetary and fiscal stimulus over the past year to pull the economy out of a record post-war slump.
Many analysts expect the economy to contract in the first quarter, but see it gradually emerging from the slump, as strong exports partly offset weak consumption.
BOJ tankan indices are derived by subtracting the percentage of pessimistic respondents from optimistic ones. A negative number means that there are more pessimists than optimists.
Reporting by Leika Kihara and Tetsushi Kajimoto; Editing by Sam Holmes
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