BOJ Survey Likely to Show Improved Biz Sentiment for 3rd Quarter

Tokyo, June 23 (Jiji Press)--The Bank of Japan's "tankan" quarterly survey for June is expected to show improved business sentiment among large manufacturers for the third straight quarter, according to private think tanks. The headline diffusion index on current business conditions for large manufacturers, including major exporters, is likely to rise to plus 14 from plus 12 in the March tankan, according to the average forecast of the 14 think tanks. The DI represents the percentage of companies reporting that their business conditions are good minus that of those saying the opposite. All think tanks projected an improvement in the DI reading. "Production activities are being bolstered by strong capital investment and bullish vehicle sales," said an official from Nomura Securities Co. Nine of the think tanks forecast that the outlook DI toward September will deteriorate. Only one think tank predicted a brighter next three months. "Uncertainty remains in foreign political situations, including the policy management of the administration of U.S. President Donald Trump," a Japan Research Institute official said. For capital spending at large companies in fiscal 2017, which started in April, the think tanks on average expected 7.6 pct growth from the previous year. "As labor shortages become worse, investments in machinery will have greater significance," an official from Mitsubishi UFJ Research and Consulting Co. said.Copyright JIJI PRESS LTD.