“Sentiment is recovering and will likely gain momentum, but businesses still aren’t confident enough,” said Junko Nishioka, chief economist at RBS Securities Japan Ltd. in Tokyo and a former central bank official. “Carmakers are looking good on the weaker yen, while others, such as firms in the electronics industry, are struggling with weak domestic demand.”
Fujitsu Ltd., which makes semiconductors and computers, said in February it would eliminate 5,000 jobs. At least a third of those cuts will be in Japan, the company said yesterday.
Some executives at Japanese companies say the yen hasn’t weakened enough, with Carlos Ghosn, chief executive officer of Nissan Motor Co., saying this week he thinks the currency is still in “handicap territory.”
The currency’s weakness is yet to significantly boost exports, which fell in eight of nine months through February. The import bill has swelled as the weaker yen drives up energy and commodity prices, adding to cost pressures for companies.
Outside the manufacturing sector, firms are more optimistic. The index for large non-manufacturers is forecast to rise to plus eight from plus four, for a seventh positive quarter.
Mizuho Financial Group Inc., Japan’s third-biggest bank by market value, will raise bonuses for the first time in five years after profit grew, spokeswoman Masako Shiono said yesterday.
More easing by the BOJ may help to push the yen lower. Kuroda said this week the BOJ will consider combining its monthly bond purchases and asset purchase fund, as well as buying more debt with longer maturities and scrapping a rule that limits the scale of bond buying. He has also suggested bringing forward open-ended asset purchases planned for 2014.
The median forecast in a survey of analysts by Bloomberg News is for the yen to weaken to 97 per dollar by the end of the year.
Goldman Sachs Group Inc. on March 18 raised its growth forecast for next fiscal year to 2.3% from 2.1%, its second upward revision this quarter.