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15 Dec 2014
Japan Tankan survey mixed – ING
FXStreet (Barcelona) - Rob Carnell of ING notes that the Tankan survey release was mixed, confirming the recent run of weak data.
Key Quotes
“The latest BoJ “Tankan” survey of business confidence, like the weekend election results, can best be described as “mixed”. Analysts like to focus on the “Large Manufacturing” index, and this fell a point from +13 to +12, though was expected to fall a further 3 points by March (see table). There was a slightly more positive reaction from medium and small firms, but the expectations for March were down in both areas. Non-manufacturing firms fared little better.”
“With the BoJ only recently having expanded their QQE (Qualitative and quantitative easing) programme to JPY80tr a year (from JPY60-70tr previously), this survey does not have all that much relevance as far as monetary policy setting is concerned. And there won’t be any further changes unless inflation continues to undershoot the BoJ’s 2.0% inflation target through 2015. A soft Tankan reading was, in any case, widely expected.”
“However, it does confirm the message from the recent poor GDP figures of a lack of rebound in activity following the April consumption tax increase, and vindicates the recent decision to postpone the second round of the consumption tax increase to April 2017 - assuming the economy is strong enough for a second try at this policy.”
Key Quotes
“The latest BoJ “Tankan” survey of business confidence, like the weekend election results, can best be described as “mixed”. Analysts like to focus on the “Large Manufacturing” index, and this fell a point from +13 to +12, though was expected to fall a further 3 points by March (see table). There was a slightly more positive reaction from medium and small firms, but the expectations for March were down in both areas. Non-manufacturing firms fared little better.”
“With the BoJ only recently having expanded their QQE (Qualitative and quantitative easing) programme to JPY80tr a year (from JPY60-70tr previously), this survey does not have all that much relevance as far as monetary policy setting is concerned. And there won’t be any further changes unless inflation continues to undershoot the BoJ’s 2.0% inflation target through 2015. A soft Tankan reading was, in any case, widely expected.”
“However, it does confirm the message from the recent poor GDP figures of a lack of rebound in activity following the April consumption tax increase, and vindicates the recent decision to postpone the second round of the consumption tax increase to April 2017 - assuming the economy is strong enough for a second try at this policy.”