TOKYO: 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 a subsequent nuclear safety crisis.
Policymakers and analysts warn that widespread power outages and supply chain disruptions from the March 11 quake will severely damage factory output and delay the economy's return to a moderate recovery.
The BOJ's quarterly tankan survey showed the headline index for big manufacturers' sentiment improved to plus 6 in March from plus 5 in December, compared with a median market forecast of plus 7.
But 72 percent of replies for the survey came in before the earthquake, which means it did not much 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.
The BOJ will release reference data for pre-quake and post-quake sentiment at 8:50 a.m. Monday (2350GMT Sunday).
"Today's data alone won't be of much use so the reference data next week was something that was needed," said Takeshi Minami, chief economist at Norinchukin Research Institute in Tokyo.
"We're focusing on when companies see reCONSTRUCTION [] demand picking up. But we can assume business conditions will be very severe ahead."
The index for June was seen at plus 2, showing that companies expected business conditions to worsen over the next three months .
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.
Policymakers and analysts warn that widespread power outages and supply chain disruptions from the March 11 quake will severely damage factory output and delay the economy's return to a moderate recovery.
The BOJ's quarterly tankan survey showed the headline index for big manufacturers' sentiment improved to plus 6 in March from plus 5 in December, compared with a median market forecast of plus 7.
But 72 percent of replies for the survey came in before the earthquake, which means it did not much 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.
The BOJ will release reference data for pre-quake and post-quake sentiment at 8:50 a.m. Monday (2350GMT Sunday).
"Today's data alone won't be of much use so the reference data next week was something that was needed," said Takeshi Minami, chief economist at Norinchukin Research Institute in Tokyo.
"We're focusing on when companies see reCONSTRUCTION [] demand picking up. But we can assume business conditions will be very severe ahead."
The index for June was seen at plus 2, showing that companies expected business conditions to worsen over the next three months .
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.
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