Kuroda's optimism is feeding through the economy, as recent central bank's tankan survey is expected to show robust business sentiment and, what is more important, more aggressive capital investment plans for the future. Such a tendency will add to hopes the world's third largest economy is already shaking off the hangover from April's tax hike. The survey is based on views of 10,000 Japan's companies and will be released next Tuesday. It will be the most comprehensive economic indicator yet of how entrepreneurs feel about the new burden imposed by the government. While consumers are tightening their belts, exports remain sluggish and government spending moderates, companies are going to become a crucial player for Shinzo Abe and his revival plan. The forward-looking indicator is likely to show that both large manufacturers and non-manufacturing companies will signal optimisms that business conditions will get better over the coming three months.
At the same time, Shinzo Abe is trying to add fuel to fire, by saying the deflation has ended and is going to be thwarted by recently-introduced government policies that are designed to encourage business expansion.
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