<span style="font-size: 18px; font-family: Arial, Helvetica, sans-serif; color: rgb(0, 0, 0); background-color: transparent; font-weight: 700; font-style: normal; font-variant: normal; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;">TOKYO:&nbsp;<span style="font-size: 18px; font-family: Arial, Helvetica, sans-serif; color: rgb(0, 0, 0); background-color: transparent; font-weight: 400; font-style: normal; font-variant: normal; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;">Sentiment among Japan&rsquo;s large manufacturers improved for a second straight quarter, according to a closely watched Bank of Japan survey, making a rate hike by its central bank more likely.<span style="font-size: 18px; font-family: Arial, Helvetica, sans-serif; color: rgb(0, 0, 0); background-color: transparent; font-weight: 400; font-style: normal; font-variant: normal; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;">The quarterly survey, called the &ldquo;tankan,&rdquo; showed the outlook among major manufacturers, the key so-called diffusion index, rose 1 point to plus 14 from the findings in June.<span style="font-size: 18px; font-family: Arial, Helvetica, sans-serif; color: rgb(0, 0, 0); background-color: transparent; font-weight: 400; font-style: normal; font-variant: normal; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;">The survey is an indicator of companies foreseeing good conditions minus those feeling pessimistic.<span style="font-size: 18px; font-family: Arial, Helvetica, sans-serif; color: rgb(0, 0, 0); background-color: transparent; font-weight: 400; font-style: normal; font-variant: normal; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;">The tankan for large manufacturers was plus 12 in March, marking the first drop in a year. Sentiment among large non-manufacturers was unchanged at plus 34, according to the latest tankan.<span style="font-size: 18px; font-family: Arial, Helvetica, sans-serif; color: rgb(0, 0, 0); background-color: transparent; font-weight: 400; font-style: normal; font-variant: normal; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;">The relative optimism in the latest tankan reflects some relief over an agreement on tariffs with the US, reached in July.<span style="font-size: 18px; font-family: Arial, Helvetica, sans-serif; color: rgb(0, 0, 0); background-color: transparent; font-weight: 400; font-style: normal; font-variant: normal; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;">The deal with the administration of President Donald Trump imposes a 15% tariff on most goods exported to the US Some goods face higher tariffs. Initially, the US imposed a 25% tariff on auto imports, so the latest deal is an improvement for Japanese automakers. It also increases certainty over US policy, at least for now.<span style="font-size: 18px; font-family: Arial, Helvetica, sans-serif; color: rgb(0, 0, 0); background-color: transparent; font-weight: 400; font-style: normal; font-variant: normal; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;">However, the higher tariffs imposed on exports to the world&#39;s biggest market are still squeezing profits, wages, investment, and spending for many industries.<span style="font-size: 18px; font-family: Arial, Helvetica, sans-serif; color: rgb(0, 0, 0); background-color: transparent; font-weight: 400; font-style: normal; font-variant: normal; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;">Kei Fujimoto, senior economist at SuMi Trust, said that despite the concerns about the tariffs&rsquo; impact on Japanese corporate earnings, the damage so far has been relatively limited.<span style="font-size: 18px; font-family: Arial, Helvetica, sans-serif; color: rgb(0, 0, 0); background-color: transparent; font-weight: 400; font-style: normal; font-variant: normal; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;">Inbound tourism is also helping.<span style="font-size: 18px; font-family: Arial, Helvetica, sans-serif; color: rgb(0, 0, 0); background-color: transparent; font-weight: 400; font-style: normal; font-variant: normal; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;">&ldquo;We do not believe inbound-related demand from tourists has peaked. The number of tourists visiting Japan continues to show an upward trend,&rdquo; he said. &nbsp;The tankan findings could influence an upcoming decision by the Bank of Japan on interest rates. The BOJ has kept rates near zero for years to help stimulate consumer spending and business investment and counter weak demand that led to deflation.<span style="font-size: 18px; font-family: Arial, Helvetica, sans-serif; color: rgb(0, 0, 0); background-color: transparent; font-weight: 400; font-style: normal; font-variant: normal; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;">But prices have risen above the central bank&#39;s target range of about 2%. The tankan shows the average inflation outlook for one year ahead was unchanged at 2.4%.<span style="font-size: 18px; font-family: Arial, Helvetica, sans-serif; color: rgb(0, 0, 0); background-color: transparent; font-weight: 400; font-style: normal; font-variant: normal; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;">Analysts expect the Bank of Japan to raise its benchmark rate soon, but it&rsquo;s unclear if it will do so at the next meeting later this month or later. The central bank raised its benchmark rate to 0.5% from 0.1% earlier this year.

The headquarters of Bank of Japan is seen in Tokyo, Jan. 23, 2024

Banking

Sentiment among Japan’s large manufacturers improved for a second straight quarter, according to a closely watched Bank of Japan survey, making a rate hike by its central bank more likely.

Japan's central bank survey shows an improved business sentiment 

TOKYO: Asian shares traded mostly higher Monday, cheered by a record finish last week on Wall Street.&nbsp;Japan&#39;s benchmark Nikkei 225 jumped 1.5% in morning trading to 45,729.33, rebounding from the decline late last week over concerns about the Bank of Japan&#39;s selling its holdings. Such concerns abated as markets began to see any move as gradual.&nbsp;Australia&#39;s S&amp;P/ASX 200 rose 0.4% to 8,811.10. South Korea&#39;s Kospi gained 0.8% to 3,472.82. Hong Kong&#39;s Hang Seng slipped 0.9% to 26,306.60, while the Shanghai Composite was little changed, inching up less than 0.1% to 3,821.83.&nbsp;The S&amp;P 500 rose 0.5% to close out its sixth winning week in the last seven. The Dow Jones Industrial Average added 172 points, or 0.4%, and the Nasdaq composite climbed 0.7%. All three hit all-time highs for a second straight day.&nbsp;The S&amp;P 500 rose 32.40 points to 6,664.36. The Dow Jones Industrial Average added 172.85 to 46,315.27, and the Nasdaq composite climbed 160.75 to 22,631.48.&nbsp;The rally has come on the back of expectations that the Federal Reserve will continue to cut interest rates in order to give the economy a boost. The central bank lowered them for the first time this year last Wednesday.&nbsp;If the Fed keeps cutting interest rates, that could give the struggling housing market a boost. But the growing expectations mean the market could be in for a disappointment and drop sharply if the Fed does not cut as much as traders expect.&nbsp;Fed officials have said more rate cuts are likely this year and next. Fed Chair Jerome Powell said last week that the central bank may have to react quickly because inflation is remaining stubbornly high in the American economy while the job market is slowing, all the while as President Donald Trump&rsquo;s tariffs threaten to push inflation higher.&nbsp;&ldquo;Every time the market seems to be running out of momentum, it fools most of us by pushing to higher heights,&rdquo; said Jay Woods, chief market strategist at Freedom Capital Markets.&nbsp;&ldquo;As traders continue to monitor new highs daily, they are really focused on what Fed officials will have to say as they make the speaking rounds this week.&rdquo;&nbsp;In the bond market, Treasury yields ended last week being relatively steady. The yield on the 10-year Treasury edged up to 4.12% last Friday from 4.11% late Thursday.&nbsp;In energy trading, benchmark U.S. crude rose 34 cents to $63.02 a barrel. Brent crude, the international standard, added 40 cents to $67.08 a barrel.&nbsp;In currency trading, the U.S. dollar rose to 148.31 Japanese yen from 147.91 yen. The euro cost $1.1733, down from $1.1745.

A man walks on Wall St. outside the NYSE in New York

Business

Shares rise on Fed rate cut hopes; Nikkei jumps 1.5%, while oil and U.S. yields edge higher.

Articles tagged with "Bank of Japan"

Japan's central bank survey shows an improved business sentiment

Asian shares are mostly higher after Wall Street's record week