Japan's Business Confidence Falls Sharply

Confidence among Japan's biggest manufacturers fell sharply this quarter, the Bank of Japan's quarterly business survey showed Monday, suggesting a stuttering recovery for the world's third-largest economy.

The central bank's April Tankan report – a quarterly survey of about 10,000 companies – showed a reading of 12 among major manufacturers, a steep fall from 19 in the previous quarter.

Economists say a slowdown in the Chinese economy was partly to blame, with worries that a rise in crude oil prices could eat into profits also weighing on business confidence.

The index for non-manufacturers slipped to 21 from 24 in the previous quarter.

The Tankan report, the broadest indicator of how Japan Inc. is faring, marks the difference between the percentage of firms that are upbeat and those that see conditions as unfavourable.

Japan's economy grew a modest 0.5 per cent quarter-on-quarter at the end of last year.

However, the cabinet office has recently revised down its judgement on the economy as a separate business confidence index declined in January for the third straight month.

Tokyo stocks opened higher on Monday, bolstered by gains on Wall Street and a weak yen.

The benchmark Nikkei 225 index rose 1.45 per cent to 21,513 in early trade, while the broader Topix index was up 1.40 per cent at 1,614. (AFP)