Japan Inc grows more optimistic as Kishida takes PM reins

Fumio Kishida is widely expected to compile a sizable fiscal package to shore up the economy and woo voters before national elections expected in November.

TOKYO: Confidence among big Japanese businesses unexpectedly improved for a fifth straight quarter, defying a record wave of the coronavirus and suggesting a potentially faster recovery under the nation’s new prime minister.

Sentiment among large manufacturers rose to 18 in the three months through September from 14 in the prior period, according to the Bank of Japan’s quarterly Tankan survey released Friday. The reading for service businesses edged up one point to 2.

Big firms of all types said they plan to boost investment by around 10%, slightly more than the plan three months ago. That suggests incoming premier, Fumio Kishida, who takes the helm Monday, may inherit an economy somewhat less damaged by the pandemic than anticipated.

A separate report also showed resilience in the job market, with the unemployment rate holding at 2.8% in August.

Kishida is widely expected to compile a sizable fiscal package to shore up the economy and woo voters before national elections expected in November.

The incoming premier is also seen shaking up his economic team, with reports that former Olympics minister Shunichi Suzuki is likely to be tapped to replace Finance Minister Taro Aso, an 81-year-old who has held the post longer than anyone else in the country’s modern era.

Today’s results suggest resilience among firms to the spread of the delta variant of coronavirus. Japan’s automakers have suspended production due to a shortage of parts and most of the economy was under a state of emergency until Thursday due to delta. - Bloomberg