TOKYO - Japanese business confidence rose to its highest in more than three years in September, and companies are ploughing rising profits back into their businesses.
The Bank of Japan's quarterly Tankan survey index showed confidence among large manufacturers rose to 10 points from 3 in June, the highest since June 1997. It means 10 per cent more companies are optimistic about conditions than pessimistic. Economists had expected the index to advance to 7 points.
Japan's largest companies are pouring more money into factories and equipment to expand production. If that translates to new jobs and pay rises, consumer spending - which accounts for 60 per cent of the economy - could take off.
The yen rose against the dollar after the survey was released.
"It's a bullish survey - it tells us the recovery is continuing and we don't expect it to peter out," said James Malcolm, economist at J P Morgan Securities (Asia). He said there was "also something for the bears."
"Very little improvement is seen in December."
Japan business confidence up
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