Japan's Tankan Survey Offers Mixed Picture; Yen Rises

MarketWatch Pulse

The Bank of Japan's tankan survey of business sentiment, closely monitored by economists, came in somewhat better than expected for the largest manufacturers, but showed a decline for most other categories, according to results released Wendesday for the just-ended quarter. The headline index covering Japan's large manufacturing enterprises during the July-September period inched up to plus 13 from plus 12 in April-June. The result beat a Wall Street Journal survey's projection of plus 10. The executives surveyed tipped the next tankan to hold at the plus-13 level. The tankan indexes represent the percentage of executives reporting "favorable" conditions minus those reporting an "unfavorable" environment. The rest of the report, however, wasn't as upbeat: Large non-manufacturers saw a result of plus 13, down from plus 19 in June, with the group forecasting a slight rebound to plus 14 for December. Medium-sized manufacturers fell to plus 5 from plus 8, while small manufacturers turned pessimistic, falling to minus 1 from plus 1, with the two segments tipping respective results of plus 5 and plus 1 in the next tankan. Medium non-manufacturers dropped to plus 7 from plus 10, while small non-manufacturers also retreated, dropping to zero from plus 2. The Japanese yen rose after the report, as the dollar slid to �109.62 from �109.72 ahead of the tankan. The rising yen weighed on stocks, with the Nikkei Average down 0.2% in early moves, despite the benchmark's lead futures having suggested a 0.3% gain just before the tankan results.

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