TOKYO (REUTERS) – Japanese manufacturers turned pessimistic for the first time in seven years in the three months to March, the central bank’s “tankan” survey showed on Wednesday (April 1), as the coronavirus pandemic dealt a heavy blow to business activity.
The headline index for big manufacturers’ sentiment stood at minus 8 in March, versus zero in December, the closely watched survey showed on Wednesday. It compared with economists’ median estimate of minus 10 in a Reuters poll. It marked the fifth straight quarter of declines.
It was the first time in seven years that the big manufacturers’ sentiment index had turned negative. It hit its worst reading since March 2013.
The index is seen deteriorating to minus 11 over the next three months, the survey showed.
The survey also showed big firms plan to raise their capital expenditure by 1.8 per cent in the financial year to March 2021, versus economists’ median estimate of a 1.1 per cent reduction.
The tankan’s sentiment indexes are derived by subtracting the number of respondents who say conditions are poor from those who say they are good. A negative reading means pessimists outnumber optimists.