Business sentiment among major Japanese companies was positive for the second straight quarter from October to December, a government survey showed Thursday.
The business sentiment index for companies with capital of ¥1 billion or more as of Nov. 15 stood at plus 4.9, up from plus 4.7 in July to September, according to the joint survey by the Finance Ministry and the Cabinet Office. The rosy sentiment reflected higher demand for products and improvements in financial conditions.
The index represents the proportion of firms seeing their business conditions improve from the previous quarter minus that of those feeling the opposite.
The large manufacturers’ sentiment index rose to plus 4.7 from plus 3.8, the second straight positive reading, with the chemical industry seeing heightened demand for automotive products and pharmaceuticals. Sentiment among food manufacturers also brightened due to price hikes.
The index for large nonmanufacturers inched down to plus 5.1 from plus 5.2, but remained positive for the second straight quarter. Financial institutions saw improved earnings amid higher lending rates and stock prices, and the services sector, including accommodation and dining, enjoyed robust demand.
The business sentiment index for midsize companies rose to plus 4.7 from plus 2.7, and that for small businesses improved to minus 3.7 from minus 9.6.
The business outlook index for large companies stood at plus 3.7 for January to March 2026 and plus 1.6 for the following quarter.
The survey also showed that combined sales at all surveyed companies are expected to grow 2.0% in fiscal 2025, which ends in March next year, from the previous year, and their capital expenditures are estimated to increase 6.6%.
Projected sales at all surveyed companies grew 2.0% from a year before in fiscal 2025, while ordinary profits are estimated to fall 0.7%. Their capital spending is forecast to increase 6.6%.
AloJapan.com