Japanese big manufacturers' sentiment was unchanged in September compared with three months earlier, a Bank of Japan corporate survey showed on Monday, but the headline figure was slightly stronger than forecast.
Following is a summary of details of the survey from a briefing by a central bank official.
- The headline diffusion index (DI) for big manufacturers' sentiment was plus 23, unchanged from the previous surveys in June and March.
- The headline number beat the market's median forecast for plus 22. The index for December was seen at plus 19, showing that firms expect conditions to worsen over the next three months for the fifth straight quarter.
- Among big manufacturers, the DI for motor vehicles and precision machinery improved for the first time in three quarters, while that for nonferrous metals worsened for the third straight quarter.
- The DI for big non-manufacturers was plus 20, below market expectations of plus 21 and hitting a one-year low. It was the first time in nearly five years that big non-manufacturers' sentiment worsened from the previous quarter.
- Among big non-manufacturers, the DI for real estate was down for the first time in nearly three years and that for retailing worsened for the second straight quarter. The DI was up for restaurants and accommodations and services for individuals.
- The outlook DI for big non-manufacturers stood at plus 21, showing that they expect conditions to improve over the next three months for the third straight quarter.
- Big firms expect their capital spending to rise by 8.7 percent in the year ending next March 31, above the market's median forecast for a 7.5 percent rise. It was revised up from a 7.7 percent rise in the June tankan.
- The employment diffusion index, or the percentage of firms saying they had excess workers minus those saying they had insufficient numbers of workers, stood at minus 7 for big manufacturers, meaning more firms said they did not have enough workers. That compared with minus 6 in the June tankan.
- The diffusion index for input prices -- the percentage of firms saying they see input prices rising minus those saying they see them falling -- was plus 25 for big non-manufacturers, the highest reading since plus 26 in February 1991.
- The input prices index for small non-manufacturers stood at plus 33, also the highest since February 1991 when it was 34.
- Big manufacturers see the dollar averaging 115.20 yen in the current business year to next March, compared with 114.40 yen in the June tankan survey.
- The diffusion index of financial positions -- the percentage of firms saying their financial position was easy minus those saying they see their financial position as tight -- worsened for both big and small companies.
- The index for lending attitude of financial institutions -- the percentage of firms saying they see lending attitude accommodative minus those saying they see it as severe -- also deteriorated for both small and big firms.
- The DI for interest rates on loans -- the percentage of firms saying they see interest rates rising minus those saying they see interest rates falling -- was down for both big and small firms, with the index falling to levels seen in June 2006.
- The BOJ official said the bank could not analyse the impact of subprime problems through the latest tankan conducted between Aug. 28 and Sept. 28. Some 40 percent of the 10,750 firms surveyed had responded by a tentative deadline on Sept. 11.