<TABLE cellSpacing=0 cellPadding=0 width=452 border=0><TBODY><TR><TD vAlign=top width=452 colSpan=2>April 16, 2009, 7.47 am (Singapore time)
</TD></TR><TR><TD vAlign=top width=452 colSpan=2>Japan corporate mood near record low, outlook better
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TOKYO - Confidence at Japanese companies remains near record low levels, a Reuters monthly poll showed, illustrating the pain of the economy in its worst recession since World War Two due to crumbling demand at home and abroad.
Both manufacturers and service-sector firms expect the situation to improve over the next three months, however, signalling that Japanese corporate sentiment may be bottoming out as inventory adjustments make headway.
But the Reuters Tankan survey also showed a cautious view among Japanese companies that inventory adjustments may not help increase corporate capital spending amid a financial crisis that has slashed demand for Japanese cars and electronics goods.
While sentiment among manufacturers improved slightly from a record low hit in March, confidence at non-manufacturers edged down, barely above a record low hit in February, a sign that the impact from the global slump has spread to service-sector firms.
The Reuters Tankan survey found manufacturers' sentiment improved 2 points to minus 76 in April, and sentiment among non-manufacturers worsened 1 point to minus 38.
The poll of 219 firms, taken from March 26 to April 13, tracks the Bank of Japan's closely watched tankan corporate survey. The BOJ's latest quarterly tankan, released on April 1, showed Japanese business confidence crumpled at its fastest pace on record to an all-time low.
'There are some positive moves such as easing of production cutbacks, but it will take time before inventory adjustments contribute to bolstering spending on plant and equipment,' said one electric machinery company in the survey.
Sentiment in the electric machinery and autos/transport equipment sectors, major industries in Japan, stayed at record low levels but with the outlook for their sentiment improving over the next three months.
Sharp cutbacks in production of cars and electronics goods have caused ripple effects on other sectors.
'Things are not looking up because of the slump in major industries including cars and industrial machinery,' said a steel company in the survey. Sentiment in the steel/nonferrous metals sectors stood at minus 100 for the fifth straight month.
Japan's economy has taken a body blow from the collapse in world demand, with companies cutting jobs and curbing wages, prompting consumers to tighten their belts.
'Personal consumption is declining as consumers try to guard against a deterioration in living standards,' said a retailer in the survey.
'They are reluctant to buy things that are not urgently needed while intending to buy low-priced items.'
Japan's economy shrank in the final quarter of last year at the sharpest rate since the first Middle East oil crisis in 1974, as its heavy dependence on exports and weak personal consumption led to a sharper contraction than in other developed countries.
Economists expect the world's second-biggest economy to keep shrinking in the third quarter for a record six consecutive quarters of decline.
In the Reuters Tankan the percentage of respondents who say conditions are poor is subtracted from those who say they are good. A negative figure means most of those surveyed are pessimistic. -- REUTERS
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</TD></TR><TR><TD vAlign=top width=452 colSpan=2>Japan corporate mood near record low, outlook better
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</TD><TD>Feedback</TD></TR></TBODY></TABLE>TOKYO - Confidence at Japanese companies remains near record low levels, a Reuters monthly poll showed, illustrating the pain of the economy in its worst recession since World War Two due to crumbling demand at home and abroad.
Both manufacturers and service-sector firms expect the situation to improve over the next three months, however, signalling that Japanese corporate sentiment may be bottoming out as inventory adjustments make headway.
But the Reuters Tankan survey also showed a cautious view among Japanese companies that inventory adjustments may not help increase corporate capital spending amid a financial crisis that has slashed demand for Japanese cars and electronics goods.
While sentiment among manufacturers improved slightly from a record low hit in March, confidence at non-manufacturers edged down, barely above a record low hit in February, a sign that the impact from the global slump has spread to service-sector firms.
The Reuters Tankan survey found manufacturers' sentiment improved 2 points to minus 76 in April, and sentiment among non-manufacturers worsened 1 point to minus 38.
The poll of 219 firms, taken from March 26 to April 13, tracks the Bank of Japan's closely watched tankan corporate survey. The BOJ's latest quarterly tankan, released on April 1, showed Japanese business confidence crumpled at its fastest pace on record to an all-time low.
'There are some positive moves such as easing of production cutbacks, but it will take time before inventory adjustments contribute to bolstering spending on plant and equipment,' said one electric machinery company in the survey.
Sentiment in the electric machinery and autos/transport equipment sectors, major industries in Japan, stayed at record low levels but with the outlook for their sentiment improving over the next three months.
Sharp cutbacks in production of cars and electronics goods have caused ripple effects on other sectors.
'Things are not looking up because of the slump in major industries including cars and industrial machinery,' said a steel company in the survey. Sentiment in the steel/nonferrous metals sectors stood at minus 100 for the fifth straight month.
Japan's economy has taken a body blow from the collapse in world demand, with companies cutting jobs and curbing wages, prompting consumers to tighten their belts.
'Personal consumption is declining as consumers try to guard against a deterioration in living standards,' said a retailer in the survey.
'They are reluctant to buy things that are not urgently needed while intending to buy low-priced items.'
Japan's economy shrank in the final quarter of last year at the sharpest rate since the first Middle East oil crisis in 1974, as its heavy dependence on exports and weak personal consumption led to a sharper contraction than in other developed countries.
Economists expect the world's second-biggest economy to keep shrinking in the third quarter for a record six consecutive quarters of decline.
In the Reuters Tankan the percentage of respondents who say conditions are poor is subtracted from those who say they are good. A negative figure means most of those surveyed are pessimistic. -- REUTERS
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