The Bank of Japan's Tankan index for big manufacturers' sentiment fell to over six-year low of 0 in the fourth quarter of 2019 from 5 in the prior period and missing market expectations of 2. Sentiment deteriorated among enterprises producing: business oriented machinery (0 vs 16 in Q3), motor vehicles (-11 vs 2), iron & steel (-2 vs 7), production machinery (4 vs 11), processed metals (-14 vs -8), shipbuilding & heavy machinery (-7 vs 0), textiles (3 vs 9), and chemicals (2 vs 5). In contrast, sentiment rose among firms producing pulp & paper (11 vs 0), petroleum & coal products (-12 vs -18), nonferrous metals (-15 vs -18), and food & beverages (10 vs 7). Meanwhile, big firms plan to raise their capital spending by 6.8 percent, above estimates of 6 percent. Among non-manufacturing large firms, sentiment eased to 20 from 21 in Q3, but beating forecasts of 16. Business Confidence in Japan averaged 1.53 Index Points from 1983 until 2019, reaching an all time high of 53 Index Points in the second quarter of 1989 and a record low of -58 Index Points in the first quarter of 2009. source: Bank of Japan
Business Confidence in Japan is expected to be 2.00 Index Points by the end of this quarter, according to Trading Economics global macro models and analysts expectations. Looking forward, we estimate Business Confidence in Japan to stand at 9.00 in 12 months time. In the long-term, the Japan Business Confidence is projected to trend around 2.00 Index Points in 2020, according to our econometric models.