The well-known, busy streets of Shibuya, Tokyo, Japan. (Image via Japan Guide)

Confidence in Japanese business recovered amid COVID-19

A survey on Monday showed that the confidence among major Japanese manufacturers has returned after being hit by the novel coronavirus disease (COVID-19) pandemic which caused them to slump to their lowest level since the global financial crisis.

The survey came after the Japanese Government had approved more than $700 billion fresh stimuli to fund the anti-COVID-19 measures by the green tech, the third package in the 2020 financial year. Moreover, the survey also preceded the Bank of Japan's two-day monetary policy meeting on the upcoming Thursday. The Bank of Japan is likely to keep the current monetary easing tool and prepare more special measures to tackle COVID-19.

The December Tankan survey, conducted by Bank of Japan and involving about 10,000 companies, showed a minus 10 reading among big manufacturers, an increase compared to minus 27 in November's survey and minus 34 in June's survey. The figure in June was the lowest since 2009 when the worldwide finance crumbled and shocked the world's third-largest economy. However, the latest figure still fell shy compared to the market consensus estimate of minus 15.

The short term business survey also reported the difference between the percentage of upbeat firms and pessimistic firms, seeing the conditions as unfavourable. The negative reading means the companies are still pessimistic.

The big non-manufacturers companies' confidence went up to minus 5, exceeding the market consensus at minus 6. The rate was better compared to September's rate at minus 12. While it showed a sign of recovery compared to June's rate at minus 17, the rate was no better than March's figure at plus 8.

Last month, Japan finally managed to save itself from recession after a three-quarter of contraction. Yet, Japan is now facing a surge in the COVID-19 infections as the numbers of new cases broke another record in recent weeks. Moreover, the world's third-largest economy is also facing natural disasters and consumption tax's hike even before the pandemic entered the world.

When Japan met COVID-19, there was no mandatory lockdown, but the government suggested people stay home. However, the stay-at-home policy, combined with shutting off Japan for a while, did damages to its tourism and consumer spending.

Source: https://bit.ly/3a6ghz1