Europe South Asia Asia Pacific Americas Middle East Africa BBC Homepage World Service Education



Front Page

World

UK

UK Politics

Business

Sci/Tech

Health

Education

Sport

Entertainment

Talking Point
On Air
Feedback
Low Graphics
Help

Thursday, October 1, 1998 Published at 08:24 GMT 09:24 UK


Business: The Economy

Business gloom in Japan grows

Japan Inc is gloomier than ever

Japan's closely watched Tankan survey of business confidence has shown that companies are growing more pessimistic about the economy.

The main index of confidence for large manufacturers fell to a four-year low, while small manufacturers' confidence was even worse, at an all-time low.

The survey by the Bank of Japan measures the difference between firms who say the economy is improving and those who say it is worsening. It is widely regarded as a guide to future investment intentions.

Gloom spreading

Among large manufacturers, the balance of confidence was -51 in September, as opposed to -38 in June.

And small manufacturers were even more pessimistic, with the difference between those were optimistic and pessimistic about the economy standing at -57, compared to -49 in the last quarter.

Large and small non-manufacturers were also gloomy, and all 22 industry sectors showed negative figures.


[ image: Jobs for life are going as unemployment grows]
Jobs for life are going as unemployment grows
"The figures are bad overall. Even blue-chip corporate Japan is now catching up with the smaller firms in their pessimism," said Tomoko Fujii of Salomon Smith Barney.

The figures were worse than expected, and will add to pressure on Japan for a bigger stimulus package to revive the economy.

More stimulus needed

The government has already said it will increase spending by 10 trillion yen ($75bn), and the central bank has cut interest rates to 0.25%.

But Susumu Kato, chief economist of Barclays Capital Japan, said that the figures pointed to the need for a bigger government effort to revive the economy.

"The Tankan not only shows the fall in the Japanese economy but points out the government's economic policy so far has failed to work," he said.

He predicted that the economy would decline by 3% this financial year.

In contrast the government is still officially forecasting growth of 1.9%, but it is expected to revise that to a decline of 1.8%.

The central bank said it expected capital spending to fall by 2-3% this year, but some analysts said the survey suggested a fall of 10%.





Advanced options | Search tips




Back to top | BBC News Home | BBC Homepage | ©


The Economy Contents


Relevant Stories

11 Sep 98 | The Economy
Japan's recession deepens

10 Sep 98 | The Economy
Desperate measures?

09 Sep 98 | The Economy
Japan cuts rates to record lows

08 Sep 98 | The Economy
Japan on verge of 'deflationary spiral'

07 Aug 98 | The Economy
Japan unveils $110bn rescue package





Internet Links


Bank of Japan

Tankan Survey for September


The BBC is not responsible for the content of external internet sites.




In this section

Inquiry into energy provider loyalty

Brown considers IMF job

Chinese imports boost US trade gap

No longer Liffe as we know it

The growing threat of internet fraud

House passes US budget

Online share dealing triples

Rate fears as sales soar

Brown's bulging war-chest

Oil reaches nine-year high

UK unemployment falls again

Trade talks deadlocked

US inflation still subdued

Insolvent firms to get breathing space

Bank considered bigger rate rise

UK pay rising 'too fast'

Utilities face tough regulation

CBI's new chief named

US stocks hit highs after rate rise

US Fed raises rates

UK inflation creeps up

Row over the national shopping basket

Military airspace to be cut

TUC warns against following US

World growth accelerates

Union merger put in doubt

Japan's tentative economic recovery

EU fraud costs millions

CBI choice 'could wreck industrial relations'

WTO hails China deal

US business eyes Chinese market

Red tape task force

Websites and widgets

Guru predicts web surge

Malaysia's economy: The Sinatra Principle

Shell secures Iranian oil deal

Irish boom draws the Welsh

China deal to boost economy

US dream scenario continues

Japan's billion dollar spending spree