Hard data continue to disappoint

For all the optimism engendered by “Abenomics”, the recent hard data on Japan’s economy have been disappointing. Of course, it is too soon for the arrival of a new group of policymakers to be having much effect on the ground. But it is a concern that some forward-looking indicators such as machine orders are still downbeat. Sentiment indicators have in general been more positive but the latest Tankan survey bucks that trend. It suggests that the economy is returning to growth but at a tepid rate. Perhaps most striking is that manufacturers expect conditions to remain “unfavourable” in both Q1 and Q2. In other words, on this survey at least, manufacturing firms are less gloomy than they were, but they are still not optimistic.