TOKYO: Confidence in big Japanese companies rose to a three-month high in March, and sentiment in the service sector rose to a seven-month high, a Reuters poll showed. Number 4 is economy.
The monthly Reuters Tangen survey, which serves as a key indicator of the Bank of Japan's quarterly Tangen survey due on April 1, comes days after the central bank shifted from years of unusual easing toward policy normalization.
The BOJ ended eight years of negative interest rates and other vestiges of its unconventional policy on Tuesday, marking a historic shift from decades of massive monetary stimulus. But rates are expected to remain near zero for some time to support weak growth.
The latest survey canvassed 240 manufacturers and 258 non-manufacturers, of which around 237 companies responded during the March 6-15 period. Tangen is among the various indicators the BOJ examines in deciding policy steps.
It was plus 10 in March, against minus 1 in the previous month, reflecting gains in the auto industry, oil refining and chemicals.
For manufacturers, the Reuters Tanken Sentiment Index was 2 points lower than three months ago, indicating a slight decline in the BOJ Tanken's manufacturing sector.
Services sector sentiment rose to a seven-month high of plus 32, led by the retail, wholesale, information and communications sectors.
The Reuters poll underscored the delicate situation facing the Japanese economy, which narrowly escaped recession late last year, while the country's main stock index recently surpassed the bubble peak, hitting 40,000 for the first time.
A soft landing in a resilient U.S. economy, the world's largest, and underpinned by China's, could provide some comfort to Japan's trade-dependent economy.
Japan's major firms offered an average wage increase of 5.28 percent last week, the largest wage increase in 33 years, the country's largest union group Rengo said, as the BOJ's historic policy shift will spur stronger family spending.
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