MNI BRIEF: BOJ Tankan To Show Slipping Sentiment
MNI (TOKYO) - The Bank of Japan's December Tankan survey will show worse business sentiment over the quarter despite smaller and major firms stronger capital investment plans, economists predicted.
Uncertainties over global demand under the incoming U.S. administration, labour shortages and high costs will drive business sentiment lower, while the diffusion index (DI) for sentiment among major manufacturers will print at +12 in December, down from September's +13. A positive figure indicates the majority of firms see better business conditions.
The median forecast for the DI for major non-manufacturers is +33 in December, also down from September's +34.
The sentiment index for small manufacturers is projected to be -2, down from zero in September, while the read for small non-manufacturers is forecast to be at +12, down from +14.
The Tankan will also show major and smaller firms' capex plans this fiscal year are expected to rise 10.0% and 4.3%, revised from 10.6% and 2.6% in September.
While plans will remain solid, labour shortages and uncertainty over future business conditions has delayed capex implementation.
The BOJ will release December's survey results at 0850 JST on Dec 13.