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(CEP News) - Confidence amongst Japan's business leaders plummeted in the third quarter of 2008, with all major indicators below forecasts, according to the results of the Bank of Japan's closely-watched Tankan survey.
The headline large manufacturer's index fell to -3 in the second quarter from a previous reading of 5 and below the consensus forecast of -2. This is the first negative reading in five years. The outlook amongst large manufacturers was also gloomy, coming in at a reading of -4, below the -3 economists had expected and below the previous quarter's reading of 4. The non-manufacturing index fell to a reading of 1, also below the 5 economists had expected. The previous reading was 10. The outlook amongst non-manufacturing firms fell to -1 from a previous reading of 8 and was lower than the consensus forecast of 2. The Tankan all-industries Capex index, which measures capital expenditures by all Japanese industries except for the financial sector, showed large manufacturers and non-manufacturers plan to increase business investment by 1.7% in fiscal 2008. Economists had expected that figure to come in at +2.5%. In the previous quarter, manufacturers and non-manufacturers had expected to decrease spending by 2.4% The indexes are tallied by taking the percentage of firms experiencing favourable business conditions minus the percentage of those seeing unfavourable conditions. By Megan Ainscow,
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