Japan's tankan quarterly poll of the country's business confidence conducted by the Bank of Japan, showed an improvement Monday in overall business sentiment.
The poll showed business is now more confident of a full recovery of the country's economy following a yearlong recession. The report, released Monday, indicated rebounds in all categories. This includes small- to large-manufacturing and nonmanufacturing companies.
The latest quarterly poll was an improvement compared with reports over the past several quarters as the country battled with the economic effects of the coronavirus pandemic.
Business conditions of large manufacturers improved from minus 27 to minus 10 for the quarter, while sentiment from major nonmanufacturing companies rose from minus 12 to minus 5. The improvement was better than analysts' forecasts.
The tankan scores corporate sentiment by subtracting the number of negative ratings from the number of companies saying that business conditions are positive. The result of the poll is a main financial measure because it has a considerable influence on its currency rate and stock prices.
Business sentiment reported by the poll fell to its lowest in more than a decade during the summer, when the country was struggling to cope with the decline in exports and tourism.
The scores reported by the poll for the quarter ending in October showed the first improvement after six straight quarters of decline. Over the past quarter, Japan's economy expanded by 22.9% at an annualized rate. Economic activity and consumer spending improved during the last quarter, representing a significant rebound from the recession that started in late 2019 - before the pandemic.
Japan has yet to return to pre-pandemic levels. According to Capital Economics, the country's economic output is still 3.9% below the last quarter of 2019.
"The survey bolsters our view that Japan will recover quickly once the third wave of coronavirus is brought back under control, with output likely to be back at pre-virus levels in mid-2021," Capital Economics said in a statement.
