Japan’s quarterly Tankan is one of the best bits of economic data in the world: how many other business surveys cover 11,528 companies with a 98.7 per cent response rate?
It’s fascinating to look a bit beyond the main diffusion index for large corporations, which has risen from -23 in December to -14 in March. The diffusion index measures the number of businesses saying that conditions are ‘favourable’ minus the number saying they are ‘unfavourable’.
The actual survey, however, gives three choices including ‘not so favourable’:
So the number of large businesses that actually think things are good rather than bad has risen from 8 per cent to 10 per cent. That’s probably a more accurate reflection of the mood of Japanese business.
The divergence by industry is also striking, such as the optimism of the (fiscal stimulus fueled) motor industry relative to capital goods and iron & steel:
I can’t help feeling that while things are clearly getting better, Japan’s economic recovery is still some way from being strong and self-sustaining.
Also see:
