TOKYO - Japanese business confidence worsened to a two-year low in the March quarter, a central bank survey showed, underscoring concerns that Sino-U.S. trade tensions and softening global demand were taking a toll on the export-reliant economy.
The gloomy survey, which adds to growing signs of weakness in the economy, will keep pressure on the Bank of Japan to maintain or even ramp up its massive stimulus program, analysts say. The headline index for big manufacturers’ sentiment stood at plus 12 in March, worse than plus 19 marked three months ago and a median market forecast of plus 14, the BOJ’s closely-watched quarterly “tankan” survey showed on Monday.
Both big manufacturers and non-manufacturers expect business conditions to worsen further in the three months ahead, the survey showed, suggesting the hit from simmering trade tensions could broaden. “Capex plans are starting off from a weak point, so investment is not as strong as before and sentiment is weak,” said Norio Miyagawa, senior economist at Mizuho Securities.
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