Business confidence in Japan improved during the first three months of 2021, according to the Bank of Japan’s quarterly Tankan survey of sentiment amongst Japanese businesses, which found that confidence amongst large Japanese manufacturers moved into positive territory.
- The BoJ upgraded its economic growth forecast
- Yen weakness provided a boost for exporters
- South Korea’s economy expanded by 1.6% during Q1
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Business confidence in Japan improved during the first three months of 2021, according to the Bank of Japan’s (BoJ’s) quarterly Tankan survey of sentiment amongst Japanese businesses, which found that confidence amongst large Japanese manufacturers moved into positive territory.
“Japanese exports surged at an annualised rate of 16.1% during March”
The BoJ upgraded its forecast for economic growth during the current fiscal year from 3.9% to 4%. Nevertheless, despite their slightly more upbeat perspective on the broader economy, central bank officials downgraded their outlook for inflation, citing a reduction in mobile phone charges. Japan’s annualised core rate of consumer price inflation was -0.1% in March and the BoJ’s expects it to end the current fiscal year (ending in March 2022) at only 0.1%. In the longer term, it is predicted to strengthen to 1% during the fiscal year ending in March 2023, although this remains well below the central bank’s 2% target. During April, the Nikkei 225 Index fell by 1.3%, while the Topix Index dropped by 2.9%, and the TSE Second Section Index declined by 0.6%.
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