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MNI BRIEF: BOJ Tankan To Show Better Sentiment, Price View

(MNI) Tokyo

The Bank of Japan's June Tankan survey will show improved business sentiment and capital investment plans, boosted by waning supply-side restrictions and a recovery of services and inbound tourists, economists said.

The major manufacturers’ sentiment diffusion index should rise to 4 in June from 1 in March,. Forecasts range from 1-7. The median DI forecast for major non-manufacturers is 22, up from 20. A positive DI indicates most firms note better business conditions.

Economists project the small manufacturers’ sentiment index rising to -4 from -6 in March and sentiment for small non-manufacturers at 10 from 8. Major-firm capex plans will rise 9.6% from March's 3.4%, while small-firm plans will increase 4.6% against 1.4%.

Major firms’ fiscal 2023 capital investment plans are expected to rise 9.6%, revised up from +3.4% in March. Smaller firms’ capex plans should rise 4.6% vs +1.4%.

BOJ officials are closely watching corporate inflation expectations, which are rising even as import prices drop. Businesses are hiking prices more aggressively than expected and BOJ Governor Kazuo Ueda last Friday noted a change in wage-setting attitudes. (See MNI BOJ WATCH: Ueda Stresses Dangers Of Premature Tightening)

The BOJ will release June's Tankan quarterly results at 8:50 JST on July 3. (23:50 GMT on July 2)

MNI Tokyo Bureau | +81 90-2175-0040 |
MNI Tokyo Bureau | +81 90-2175-0040 |

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