October 1, 2002


Japan's Tankan shows rise in confidence
By Mariko Sanchanta in Tokyo

 
Business confidence among Japan?s large manufacturers improved slightly over the past three months, according to the quarterly 
Tankan survey of business sentiment released on Tuesday, underlining the fact that Japan?s fragile economic recovery could be 
running out of steam.

The Tankan?s closely watched large-company diffusion index which subtracts the number of companies with a negative view from
 those with a positive one - improved to minus 14 from minus 18 in the June survey.

The survey also showed that large companies plan to cut capital spending by 6.2 per cent in the year to next March.

The outlook for the current quarter to December was likely to be gloomy, economists said, with uncertainty increasing after t
he benchmark Nikkei 225 stock average hit a two-decade low earlier this month.

Weaker-than-expected consumer price index data released last week raised the possibility that Japan could enter its fourth 
consecutive year of deflation, a phenomenon not seen in an industrialised country since the second world war.