MNI: BOJ's March Tankan To Show Key Sentiment Slips
MNI (TOKYO) - The Bank of Japan's March Tankan survey will show the benchmark business sentiment will likely fall slightly from three months ago and capital investment plans by major firms in fiscal 2025 are likely to be weaker from a year earlier, economists predicted.
Concern over the global economy caused by U.S. trade policies and a weaker Chinese economy will hit manufacturing sentiment, but the pass-through of high labour and raw material costs will somewhat boost non-manufacturers.
Economists expect the diffusion index (DI), calculated by subtracting the percentage of companies reporting deteriorating business conditions from those reporting an improvement, for sentiment among major manufacturers will print at +12 in March, down from +14 in December. A positive figure indicates the majority of firms see better business conditions.
Their median DI forecast for major non-manufacturers is +33 in March, unchanged from December.
The sentiment index for small manufacturers is projected to be -1 in March, down from +1 in December, while that for small non-manufacturers is forecast to be at +16, unchanged from December.
The BOJ will release the outcome of its Tankan quarterly business survey for March conducted from early February to March 31 at 0850 JST on April 1.
CAPEX PLANS
The economists believe the Tankan will show capital investment plans by major firms in fiscal 2025 are likely to rise 2.9% vs 4.0% in fiscal 2024 plans found in the April Tankan last year.
Capex plans by smaller firms in fiscal 2025 are likely to fall 3.3% vs. -3.6%. Capital investment plans will remain solid despite the delay to implementation due to labour shortages and uncertainties.