Corporate sentiment in Japan is at its highest level in two years, a Bank of Japan survey showed on Thursday. It's a sign that the export-driven economic recovery is taking hold.
The survey for the latest three months, showed Europe's sovereign debt woes and the sharp appreciation in the yen that followed, have not yet taken a toll as Japanese companies benefit from solid exports to Asia. The index measuring big manufacturers' sentiment, turned positive for the first time in two years and showed big firms revising up capital spending plans. That was higher than market forecasts, and was the fifth consecutive quarter of improvement.
Japan's first-quarter economic growth outpaced that of the United States and Europe on solid exports to Asia. But falling shipments and rising inventory in May signaled the benefits of a rebound in exports may be moderating.
Takashi Hibino, Deputy President of Daiwa Securities Capital Market said "Japanese businesses are at a point where they are slowly regaining confidence and making a mild recovery. However, there has been a crisis in Europe and anxiety has begun to appear in parts of China as well, so I think even the companies that were aggressively pursuing business are going to be cautious."