Japan big manufacturers turn pessimistic for first time in 7 years over coronavirus - BOJ tankan

Credit: REUTERS/SAKURA MURAKAMI

Japanese manufacturers turned pessimistic for the first time in seven years in the three months to March, the central bank's "tankan" survey showed, as the coronavirus pandemic dealt a heavy blow to business activity.

TOKYO, April 1 (Reuters) - Japanese manufacturers turned pessimistic for the first time in seven years in the three months to March, the central bank's "tankan" survey showed, as the coronavirus pandemic dealt a heavy blow to business activity.

The headline index for big manufacturers' sentiment stood at minus 8 in March, versus zero in December, the closely watched survey showed on Wednesday. It compared with economists' median estimate of minus 10 in a Reuters poll. It marked the fifth straight quarter of declines.

It was the first time in seven years that the big manufacturers' sentiment index had turned negative. It hit its worst reading since March 2013.

The index is seen deteriorating to minus 11 over the next three months, the survey showed.

The survey also showed big firms plan to raise their capital expenditure by 1.8% in the financial year to March 2021, versus economists' median estimate of a 1.1% reduction.

The tankan's sentiment indexes are derived by subtracting the number of respondents who say conditions are poor from those who say they are good. A negative reading means pessimists outnumber optimists.

For the POLL story on the survey:

Survey results on the BOJ's website:

https://www.boj.or.jp/en/statistics/tk/gaiyo/2016/tka2003.pdf

(Reporting by Leika Kihara and Tetsushi Kajimoto; Editing by Chris Gallagher)

((tetsushi.kajimoto@thomsonreuters.com; +81-3-4563-2731;))

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