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The tankan index of large manufacturers for September reached +13 against +14 in June
BOJ tankan due 2350 GMT on September 30 (0850 JST on October 1)
TOKYO, September 17 (Reuters) – Business confidence among major Japanese manufacturers likely fell in the third quarter as the highly contagious variant of COVID-19 Delta hit business and consumer activity, the closely watched central bank’s Tankan survey is expected to show.
Other data should show that nationwide consumer staples prices were flat in August compared to the same month a year earlier, as higher energy costs and overnight stays offset lower prices. mobile phone charges, analysts said.
The Bank of Japan’s (BOJ) quarterly Tankan survey of business sentiment is expected to show the overall sentiment index for major manufacturers fell to 13 from 14 in June, the poll of 17 economists revealed on Friday.
“Sales of durable goods have been strong so far, offsetting a decline in the consumption of services,” said Takeshi Minami, chief economist at the Norinchukin Research Institute.
Reduction in production by automakers due to a global chip shortage and parts supply difficulties due to the explosive growth of the COVID-19 Delta variant in Southeast Asia in the wake of the summer activity, he said.
The mood among large non-manufacturers was also likely to ease slightly, but avoid slipping into clear pessimism, coming back flat from plus 1 in June, according to the poll.
The forecast was in line with a recent data set that shows businesses are facing new headwinds from the pandemic, which remain particularly painful for companies in the service sector.
Data this week showed the country’s exports registered double-digit gains in August, although the pace of growth weakened as COVID-19 hit major Asian supply chains and slowed production of factories.
Japan’s economic growth is expected to slow in the current quarter from April to June in part because of these disruptions, even as the country’s vaccination rates improve and daily COVID-19 infections appear to have reached a peak.
For the next three months, optimism among large manufacturers is expected to improve slightly to 15, while the outlook index for large non-manufacturers is expected to rise to plus 5, according to the poll.
Large companies are likely to increase their capital spending plans by 9.1% for the current year as the outlook improves.
The BOJ will announce the results of the quarterly tankan survey at 8:50 a.m. on October 1.
The central bank is expected to maintain its massive stimulus measures at its September 21-22 policy meeting, as supply bottlenecks caused by factory closures in Asia and lackluster consumption weigh on the economy .
Separate data due Sept. 24 is expected to show nationwide basic consumer prices, which exclude fresh food but include petroleum products, were flat in August compared to the previous year, according to the poll.
(Reporting by Daniel Leussink; Editing by Sam Holmes)
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