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Japan Manufactures See Promise in Abe Policies

In data released Monday, Japan’s manufacturers showed confidence in Prime Minister Shizo Abe’s pro-inflation policies. The quarterly Tankan index for large manufacturers rose to plus four in June. This is up from minus eight in March, according to data released by the Bank of Japan.

A positive reading indicates that those positive on the economy outnumber those who are negative. Large companies plan to increase capital spending 5.5 percent through March 2014.

“Manufacturers’ profitability has improved,” Takuji Okubo, chief economist at Japan Macro Advisors. “But while near-term economic data may be favorable, corporate managers know there is no guarantee that these figures are sustainable.”

Large Japanese companies are more confident for the third quarter at plus 10. Manufacturers believe that the yen will trade around 91.20 against the dollar through the fiscal year ending March 2014.

 

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