Business confidence up among Japan’s big manufacturers

Confidence among Japan's largest manufacturers rose as business conditions improved for the second-straight quarter, a key survey showed Monday.

The Bank of Japan's closely watched quarterly Tankan survey is considered the broadest indicator of how Japanese businesses are faring.

It reports the difference between the percentage of firms that are upbeat and those that see conditions as unfavorable.

A positive figure means more businesses feel optimistic than pessimistic.

Among major manufacturers, business confidence rose to plus nine from plus five three months earlier, the survey showed.

The headline figure — the highest level since June last year — came after the first improvement in seven quarters in July, and beat market expectations of plus six.

Optimism also grew among non-manufacturers, from plus 23 to plus 27, which was the sixth-straight quarterly improvement and the highest level since November 1991 and against market expectations of plus 24.

Positive figures in the survey are "driven by a strong automotive industry buoyed by the resolution of the semiconductor supply shortage that has plagued the industry this year," Hiroyuki Ueno, senior economist at Sumitomo Mitsui Trust Asset Management (SuMi TRUST), said ahead of the survey's release.

"In the non-manufacturing sector, the continued boom in inbound travel is supporting business confidence," he said.

Analysts have said the BoJ's latest survey is among the key data affecting the central bank's policy decisions.