[an error occurred while processing this directive]
BBC News
watch One-Minute World News
Last Updated: Thursday, 1 July, 2004, 06:14 GMT 07:14 UK
Sunny outlook for Japanese firms
Japanese commuters head for the subway in Tokyo
The bustle is back in Japan's economy
Japanese firms see brighter prospects for the country's economy than at any time since the economy slumped in the early 1990s, a new survey shows.

The closely-watched quarterly Tankan survey shot up in June to its highest level since August 1991.

Optimism grew strongly among large manufacturing firms and the news pushed the Nikkei share index up 0.6%.

The Tankan marks a return to good economic news, following a slowing in industrial output in May.

Japan's currency also rose strongly in response to the survey's findings to 108 yen to the dollar.

Beating the bubble

The Tankan survey asks more than 10,000 businesses in various sectors of the economy to rate whether they see favourable or unfavourable conditions ahead.

Rising oil prices and commodity prices have not dampened corporate sentiment
Shinichiro Kobayashi, UFJ Institute
A positive number indicates the optimists outnumber the pessimists.

The survey recorded a plus 22 reading for large manufacturing firms.

But unlike the previous Tankan, the survey showed small firms also feeling better about the future.

The small manufacturers' index was plus 2, the first positive reading since March 1991, while non-manufacturing firms - a weak spot in the March survey - were also seeing brighter days ahead.

Beating the 1991 readings is an important psychological step, since that was the year the economic bubble of soaring property and share prices burst, sending Japan spiralling into a decade of repeated recessions.

Good numbers

Despite the weak industrial output data in May, other economic indicators have been pointing to improving conditions.

Economic growth hit an annualised 6.1% in the three months to March and 7.3% - the best rate in 13 years - in the quarter before.

"Rising oil prices and commodity prices have not dampened corporate sentiment," said Shinichiro Kobayashi, economist at the UFJ Institute in Tokyo.

"At last, the improvement among large manufacturers started to buoy sentiment in small to medium-sized companies."


WATCH AND LISTEN
The BBC's Sheranjit Leyl
"Japan's economy has grown for eight consecutive quarters"



SEE ALSO:
Mixed message for Japan's economy
29 Jun 04  |  Business
Japan still battling deflation
25 Jun 04  |  Business
Japan trade surplus rises again
23 Jun 04  |  Business
Japan's growth beats estimates
18 May 04  |  Business
Optimism at 7-year high in Japan
01 Apr 04  |  Business
Export-led growth spurt for Japan
18 Feb 04  |  Business


RELATED INTERNET LINKS:
The BBC is not responsible for the content of external internet sites


PRODUCTS AND SERVICES

News Front Page | Africa | Americas | Asia-Pacific | Europe | Middle East | South Asia
UK | Business | Entertainment | Science/Nature | Technology | Health
Have Your Say | In Pictures | Week at a Glance | Country Profiles | In Depth | Programmes
Americas Africa Europe Middle East South Asia Asia Pacific