Confidence among large Japanese manufacturers rose sharply for the second consecutive quarter, thanks to the yen’s fall and growing exports, the Bank of Japan’s Tankan survey showed on Monday.
The closely watched index in the quarterly survey climbed by 12 points since March, to plus 4. It was the first time the index had broken into positive figures since September 2011.
Large manufacturers expected the index to continue to rise to plus 10 in the next quarter, the survey found.
A positive number indicates optimists outnumber pessimists.
The index for large non-manufacturers’ also climbed to plus 12 from plus 6, the survey showed.
Capital spending plans for the current financial year through March 2014 among large companies in the manufacturing and non-manufacturing sectors were revised upwards from the March survey.
They now planned to raise capital investment by 5.5 per cent, the survey said.
Confidence among medium-sized manufacturers in the world’s third-largest economy jumped to minus 4 from minus 14 while the index for small manufacturers rose to minus 14 from minus 19.
The yen has declined about 20 per cent against the US dollar since November as Japan carries out monetary easing measures. The depreciation of the currency makes Japanese goods more competitive abroad and improves repatriated revenues.
After he became prime minister in December last year, Shinzo Abe urged the central bank to take “aggressive” monetary easing steps to prop up the economy.
Bank of Japan governor Haruhiko Kuroda vowed to carry out aggressive monetary easing to achieve a target of 2 per cent inflation within about 2 years and pull the economy out of the deflation that has plagued the country for more than a decade.
On Friday, the government said consumer prices stopped falling in May for the first time in 7 months.
The bank surveyed 10,623 companies from May 28 to June 28 for the latest Tankan survey, and 99 per cent responded.