Japan Manufacturers Least Pessimistic Since 2008 on Export Rise

Japan’s largest manufacturers became the least pessimistic about the economy since 2008 as a global rebound drove demand for exports. The Tankan index of sentiment rose to minus 14 in March from minus 25 in December, the fourth straight gain, the Bank of Japan said in Tokyo today. The biggest companies plan to cut capital spending by 0.4 percent in the fiscal year starting today, the least in March surveys for three years. Stocks rallied on optimism demand from abroad will sustain Japan’s recovery from its worst postwar recession, which has been tempered by persistent deflation. The survey came as China reported manufacturing accelerated and may prompt Bank of Japan Governor Masaaki Shirakawa to refrain from boosting liquidity injections at a board meeting next week. “Exports have been stronger than we initially expected, so that’s helped the economy continue its recovery with momentum,” said Junko Nishioka, chief economist at RBS Securities Japan Ltd. in Tokyo. “It’s unlikely we’ll see further easing from the bank in this upcoming meeting.” The Nikkei 225 Stock Average gained 0.7 percent to 11,168.91 at the lunch break in Tokyo, heading for its highest close since October 2008. Benchmark 10-year notes gained after yesterday posting their worst month since October. The Tankan sentiment reading matched the median forecast of 23 economists in a Bloomberg News survey. A negative number means pessimists outnumber optimists.