BoJ survey could set path to rate hike
Monday, 2 July 2007
TOKYO, July 1 (AFP): Japan's central bank could set the scene for another interest rate rise this week when it publishes a key survey expected to show solid corporate sentiment and rising investment, analysts say.
The Bank of Japan's (BoJ) quarterly "Tankan" survey, due Monday, is likely to show confidence holding firm close to a two-year high, they add.
Major companies are also expected to have upgraded their capital expenditure on new plants and equipment, helping to maintain Japan's longest sustained expansion since World War II.
"We believe that profit forecasts will be upgraded. In that context I think the capex plans will be upgraded as well," predicted Hiromichi Shirakawa, chief economist for Credit Suisse in Tokyo.
The March Tankan survey of over 10,000 firms showed that large companies in all industries planned to raise capital spending by 2.9 per cent in the current fiscal year to March 2008, after an 11.9 per cent rise last year.
Japanese firms tend to be cautious on spending at the start of the fiscal year and gradually upgrade their plans, and market expectations are for an upgrade to growth of between 8.0 and 9.0 per cent.
The Bank of Japan's (BoJ) quarterly "Tankan" survey, due Monday, is likely to show confidence holding firm close to a two-year high, they add.
Major companies are also expected to have upgraded their capital expenditure on new plants and equipment, helping to maintain Japan's longest sustained expansion since World War II.
"We believe that profit forecasts will be upgraded. In that context I think the capex plans will be upgraded as well," predicted Hiromichi Shirakawa, chief economist for Credit Suisse in Tokyo.
The March Tankan survey of over 10,000 firms showed that large companies in all industries planned to raise capital spending by 2.9 per cent in the current fiscal year to March 2008, after an 11.9 per cent rise last year.
Japanese firms tend to be cautious on spending at the start of the fiscal year and gradually upgrade their plans, and market expectations are for an upgrade to growth of between 8.0 and 9.0 per cent.