TOKYO, Japan (AP) - The business sentiment of major Japanese manufacturers has improved for the second consecutive quarter in July to September according to a survey by the central bank released on Monday.
The Bank of Japan's quarterly 'tankan survey' measured the business sentiment of major manufacturers as plus 9, up from +5 in June.
The sentiment among non-manufacturers has improved by four points, to plus 27. This is the best result for about three decades.
The quarterly tankan survey measures the corporate mood by subtracting those companies who say that business conditions are bad from those who respond positively.
The pandemic has affected tourism, the third largest economy of the world in recent years. Incoming travelers have slowly returned to levels near those of pre-pandemic.
Analysts report that the negative impact of COVID-19 has also decreased on computer chips and other critical parts, with production gradually recovering.
Toshihiro Nakahama, Chief Economist at Dai-ichi Life Group, said that the recent low yen, which came along with a gradually improving supply chain, is believed to be a factor in boosting sentiments among large manufacturers.
He said that the return of tourists from abroad and the healthy domestic tourism in the summer holidays would likely boost sentiments for non-manufacturers.
Over the last decade, Japan's economy has stagnated, and wages have barely increased. The Russian war in Ukraine has also led to a rise in energy prices. This is a problem for Japan because it imports most of its oil at a moment when the Japanese yen has been weakening.
The weaker yen also has a positive effect on exporters such as Toyota and Nintendo, who have seen their overseas earnings increase. Recently, the dollar was trading at around 149 yen. This is up from less than 130 yen back in January.
The tankan is predicting a slight improvement in the business sentiment of large manufacturers three months hence, with a score of plus 10.
The Bank of Japan's interest rate policy in the coming months will be closely monitored. For years, the central bank kept interest rates in negative territory or at zero to help Japan get out of its economic rut. The BOJ aims for a stable price increase of 2%.
Yuri Kageyama has joined X, formerly Twitter