BOJ Tankan Likely to Show Halt in Biz Sentiment Improvement

Economy

Tokyo, Sept. 27 (Jiji Press)--The Bank of Japan's upcoming "tankan" quarterly report is expected to show a halt in the improvement of business sentiment among large manufacturers, reflecting semiconductor shortages and disrupted automobile parts procurement.

The September survey, due out Friday, is expected to show the headline diffusion index for sentiment among large manufacturers at plus 14, unchanged from the previous June report, according to the average estimate in a Jiji Press survey of 16 private think tanks.

The DI represents the percentage of companies reporting that their business conditions are good minus that of those saying the opposite.

Business sentiment is seen receiving support from robust exports powered by overseas economic recovery, while corporate earnings are weighed down by a surge in materials prices, the think tanks said.

"Sentiment among automakers, forced to revise down their production plans, is expected to deteriorate significantly," due to difficulties procuring auto parts amid the spread of the novel coronavirus in Southeast Asia, said Mitsubishi UFJ Morgan Stanley Securities Co.

[Copyright The Jiji Press, Ltd.]

Jiji Press