Bank of Japan Corporate Survey Results Better Than Imagined Three Months Ago
December 14, 2010
11,183 companies participated in the latest quarterly survey by Japan’s central bank. In the table below which documents the evolution of results, abbreviations used in the first four columns of data stand for big manufacturers (Bm), big non-manufacturer (Bnm), small manufacturers (Sm) and small non-manufacturers (Smn). Where no “a” or “f” suffix is shown after the date of the survey, the figures are actual results. The bottom three rows are expected December 2010 results projected in the September 2010 survey (Dec 2010f), the actual results of the December 2010 survey reported today (Dec 2010a), and what respondents in the latest survey think the results will be in the next survey to be taken in March 2011. The values in this table are diffusion indices representing the percent of companies where conditions are favorable minus the percent claiming conditions to be unfavorable and omitting any firms where conditions have been neutral. When the diffusion index is positive, there is more optimism than pessimism.
All five aggregated classes of survey participants had a weaker reading in December than September, but the degree of deterioration was smaller than predicted in the September survey in every case. Still, there had been an improving trend since early 2009, and firms remain pessimistic about the outlook, especially among those of smaller size.
The data are not so weak that Bank of Japan officials will feel compelled to make their monetary policy stance even more accommodative than it already is. The key interest rate is now targeted at zero to 0.1% and hasn’t exceeded 0.5% since September 1995. Also, the central bank is presently doing modest asset purchases. The projected diffusion index for large firms is only marginally below zero in March 2011, and for all firms it is stronger than every reading between December 2008 and March 2010. Moreover, information on output prices shows progress in eradicating deflation. And also, planned investment growth in fiscal 2010 has been revised upward to 3.0% from 1.6% for non-manufacturing large firms, to 2.9% from 2.4% for all large firms, and to +0.4% from minus 1.0% for all firms that were surveyed.
| Bm | Bnm | Sm | Snm | All | |
| Dec 1998 | -49 | -39 | -56 | -43 | |
| Dec 1999 | -17 | -19 | -32 | -28 | |
| Dec 2000 | 10 | -10 | -16 | -23 | |
| Dec 2001 | -38 | -22 | -49 | -39 | -40 |
| Dec 2002 | -9 | -16 | -33 | -36 | -28 |
| Dec 2003 | 11 | -9 | -13 | -28 | -15 |
| Dec 2004 | 22 | 11 | 5 | -14 | 1 |
| Dec 2005 | 21 | 17 | 7 | -17 | 5 |
| Dec 2006 | 25 | 22 | 12 | -4 | 10 |
| Dec 2007 | 19 | 16 | 2 | -12 | 2 |
| Mar 2008 | 11 | 12 | -6 | -15 | -4 |
| Jun 2008 | 5 | 10 | -10 | -20 | -7 |
| Sep 2008 | -3 | 1 | -17 | -24 | -14 |
| Dec 2008 | -24 | -9 | -29 | -29 | -24 |
| Mar 2009 | -58 | -31 | -57 | -42 | -46 |
| Jun 2009 | -48 | -29 | -57 | -44 | -45 |
| Sep 2009 | -33 | -24 | -52 | -39 | -38 |
| Dec 2009 | -25 | -21 | -41 | -34 | -31 |
| Mar 2010 | -14 | -14 | -30 | -31 | -24 |
| Jun 2010 | 1 | -5 | -18 | -26 | -15 |
| Sep 2010 | 8 | 2 | -14 | -21 | -10 |
| Dec 2010f | -1 | -2 | -22 | -29 | -17 |
| Dec 2010a | 5 | 1 | -12 | -22 | -11 |
| Mar 2011f | -2 | -1 | -23 | -29 | -18 |
Copyright Larry Greenberg 2009. All rights reserved. No secondary distribution without express permission.
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