Japan business confidence falls after twin disasters

TOKYO (AP) – Japan’s business confidence has fallen following last month’s twin natural disasters and amid the ongoing nuclear crisis, the central bank said yesterday.

The Bank of Japan’s closely watched “tankan” survey of business sentiment - the main index for large manufacturers - slumped to 6 after the March 11 earthquake and tsunami, down from 7 before the disasters.

The central bank released a post-quake version of its March tankan survey to reflect the impact of the disasters and the nuclear crisis they spawned on the country’s business sentiment.

The tankan figure represents the percentage of companies saying business conditions are good minus those saying conditions are unfavorable, with 100 representing the best mood and minus-100 the worst.

Last month’s magnitude 9 earthquake and ensuing tsunami decimated much of northern Japan, killing up to 25,000 people. More than 12,000 are confirmed dead, and another 15,500 are missing.

The disasters also destroyed many factories in the region, forcing a string of companies, including Toyota Motor Corp. and Sony Corp., to suspend output due to a shortage in components.

Most of the responses from companies were received before March 11, but it showed diverging views after the 9.0 magnitude earthquake inflicted plant damage, power shortages and major disruption to supply chains.

The BoJ’s report on Friday showed business sentiment among large manufacturers improving to “six” in March from “five” in December.

Monday’s survey showed that the sentiment index among major manufacturers was set to fall to “minus two” in the April-June period, according to firms polled after the quake.

The index measures the percentage of firms that say conditions are good minus those that say conditions are bad — meaning that any figure above zero indicates general, if cautious, optimism in the corporate sector.