Japan business survey shows slight improvement in outlook for manufacturers

abcnews.go.com:

A quarterly survey by Japan's central bank shows business sentiment among manufacturers has improved slightly, especially in major heavy industries such as automaking, fossil fuels and machinery

BANGKOK — A quarterly survey by Japan’s central bank shows business sentiment has improved slightly, especially in major heavy industries such as automaking, fossil fuels and machinery, while services industries were less upbeat.

The survey released Friday by the Bank of Japan, called the tankan, might influence the central bank's decision on whether to raise its benchmark interest rate next week. It shows the difference between companies saying they are optimistic about business conditions and those that are pessimistic.

The latest survey's outcome undermined expectations for a rate hike, and the Japanese yen weakened, with the U.S. dollar trading at 152.90 yen on Friday, near its highest level in two weeks. Meanwhile, the benchmark Nikkei 225 stock index fell more than 1%.

“Expectations are for the BOJ to maintain its short-term interest rate at 0.25% next week, marking the fourth consecutive meeting with no change,” IG said in a commentary.

Japan’s economy grew at a revised 1.2% annual pace in the last quarter, helped by sustained consumer spending. But the outlook ahead is uncertain, IG economists noted, given U.S. President-elect Donald Trump's vows to impose higher tariffs on imports from many countries, which could jolt both the regional and the global economy.

“The mediocre increase in business conditions across all firm sizes in the latest tankan suggests that activity is unlikely to rebound meaningfully this quarter, following a slowdown in (the last quarter),” Toh Au Yu of Capital Economics said in a commentary.