Sentiment among Japanese corporates remains mixed in December

Optimism among Japanese corporates was mixed in December, according to the results of a widely followed survey.

The Reuters Tankan survey’s gauge of sentiment among manufacturing companies jumped to a reading from +3 to +9, its first improvement in four months.

In parallel, a barometer for service-sector oriented firms dipped from 22 to 18 - the lowest since November 2014.

On average, the 514 large and medium-sized companies canvassed by Reuters expected sentiment to be largely unchanged over the next three months.

The index for manufacturing sentiment was seen at +10 in March.

Respondents from both the manufacturing and services sector cited by Reuters pointed to declining orders from Asian countries and lower activity levels as a result of the slowdown in the Chinese economy.

The Reuters survey attempts to anticipate movements in the Bank of Japan’s own Tankan survey.

Assessment of coincident index is “weakening”

Overnight, the Japanese Cabinet Office’s composite index of leading economic indicators improved to a reading of 102.9 from 101.6 in the month before.

The index of so-called co-incident indicators rose to 114.3 from 112.3 in the month before. Nonetheless, the Cabinet Office described the assessment of the coincident index as “weakening”.

BoJ governor sees no need for negative deposit rates

Speaking from Tokyo on 7 December, BoJ governor Haruhiko Kuroda said the central bank did not need to implement negative deposit rates.

“Our QQE has had an intended impact on the economy and financial markets. Banks have been increasing their loans to the real economy ... Rebalancing has also been taking place.”

Kuroda also took aim at the risk of imposing excessive regulation on banks, which would hamper their ability contribute to sustainable economic growth.

As of 09:01 dollar/yen was 0.16% higher at 123.15.