Japanese companies are expecting a marked deterioration in business conditions, according to a central bank survey published hours after Prime Minister Shinzo Abe secured a sweeping victory in Sunday’s general election.
The Bank of Japan’s quarterly Tankan poll of more than 10,000 companies showed that the overall assessment of business conditions had improved since September by a single point to 5, where a positive number denotes a “favourable” environment. But companies’ forecasts for conditions in three months’ time produced an average score of 1, with a particularly gloomy outlook among smaller companies.
Weak retail spending was a factor behind businesses’ shaky confidence, with a renewed slump expected after a recent temporary boost from the release of Apple’s hugely popular iPhone 6, said Hiromichi Shirakawa, an economist at Credit Suisse. There was also concern over the outlook for car sales and construction activity, he added.