"The Tankan confirmed that expectations among big Japanese manufacturers for a weaker yen and a steady economic recovery more than offset recent market turmoil"
- Takeshi Minami, chief economist as Norinchukin Research Institute
Manufacturers' sentiment in Japan turned positive in the April-June period for the first time in almost two years, the Bank of Japan's Tankan survey showed. The big manufacturers' index jumped 12 points to plus 4 in the second quarter, up from minus 8 in the three month to March. This was the second consecutive quarter of improvement in the sentiment and the first positive reading since September 2011, adding to signs that Prime Minister Shinzo Abe's "Abenomics' policy is working.
In addition to that, robust private consumption also pushed service-sector sentiment up, a positive sign for the BOJ's plan to end 15-year long deflation and achieve the 2% inflation goal in two years. The index for big non-manufacturing companies rose 6 points to plus 12, beating analysts' expectations for a reading for plus 11.
The positive results increase chances that the nation's central bank will back away from additional monetary easing in the near future and consider revising up its economic outlook at next week's rate review.
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