Business confidence among Japan's large manufacturers improves in March

Large Japanese manufacturers' business sentiment in March improved from three months earlier, with capital expenditure expected to improve, the Bank of Japan (BOJ) said Monday.

In the central bank's quarterly Tankan survey, the index reflecting confidence among large manufacturers stood at plus 12, rising 2 points from the previous survey. The reading, however, came in lower than median market expectations for a reading of plus 14.

The index for large non-manufacturers, meanwhile, rose 2 points from the previous survey to stand at plus 20, with the reading falling in line with market expectations.

Both large manufacturers and non-manufacturers surveyed said they plan to increase capital expenditure by 0.6 percent in the current fiscal year.

The increase in business spending compares to median market forecasts for a 0.1 percent decline.

But while business spending ahead is expected to mark an uptick, manufacturers said that in the coming three months they expect business conditions to deteriorate slightly to a reading of plus 11.

The BOJ's quarterly Tankan survey is regarded by economists as Japan's most closely watched gauge of business sentiment and the current diffusion indexes reveals that the percentage of companies reporting favorable business conditions outweigh those reporting unfavorable environments.

The survey informs the central bank on a number of issues and future policy dialogue, with the inflation rate and its monetary stimulus program closely in focus. Enditem