The Tankan survey published by the Bank of Japan in early October 2000 suggests that the Japanese economy is moving out of recession. However, there are fears that a modest recovery achieved over the course of 2000 may be short lived and most companies do not expect the recent improvement in conditions to continue.
In these circumstances the government is not expected to change its current supportive fiscal policy.
Different sectors of the economy have had varying experiences in recent months. Notably, larger companies have been faring much better than small ones.
According to the Tankan survey, the diffusion index for large manufacturing companies rose by 7 points (more than expected) to plus 10 between June and September 2000. Moreover, large companies have reported that in the year to March 2001 they plan to increase capital expenditure by 6%. Allowing for revisions this is 4.6% more than the target reported in the Bank of Japan’s previous survey...
