Business
Japan post-quake business confidence to drop: BoJ
  • | AFP | April 04, 2011 09:18 AM

Japanese business confidence is set to plunge in the months following the March 11 earthquake and tsunami and subsequent nuclear crisis, the Bank of Japan said in its Tankan survey on Monday.

The debris-strewn premises of a small firm are seen in a quake-hit Rikuzentakata on March 22, 2011.

The central bank re-released Friday\'s quarterly survey on Monday to show the breakdown in the replies it received before and after the disasters.

Most of the responses from companies were received before March 11, but it showed diverging views after the 9.0 magnitude earthquake inflicted plant damage, power shortages and major disruption to supply chains.

The BoJ\'s report on Friday showed business sentiment among large manufacturers improving to "six" in March from "five" in December.

Monday\'s survey showed that the sentiment index among major manufacturers was set to fall to "minus two" in the April-June period, according to firms polled after the quake.

The index measures the percentage of firms that say conditions are good minus those that say conditions are bad -- meaning that any figure above zero indicates general, if cautious, optimism in the corporate sector.

Sentiment among medium-sized manufacturers in the April-June period was set to fall from "minus three" before the quake to "minus seven" according to those polled afterwards, Monday\'s report showed.

The central bank considers the Tankan a key source of information when formulating monetary policy, but the March survey may not be the best indicator as most responses were received before the earthquake.

The huge earthquake and resulting tsunami on March 11 killed 12,020 people and left 15,512 missing, according to the latest national police count.

Japan has said the cost of rebuilding after the twin disasters could hit 25 trillion yen (USD309 billion).

The estimate does not account for wider issues such as how radiation from the Fukushima Daiichi nuclear plant, which was crippled by the quake, will affect food and water supply, amid an ongoing contamination scare.

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