— Japan MOF: Q1 Major Firm Sentiment -1.1 Pt Vs Q4 -5.0 Pt
— Japan MOF: Q1 Sentiment Worse Than -0.9 Pt Seen In Q4 Poll
— Japan MOF: Major Firm Sentiment Seen Q2 +1.5 Pt, Q3 +6.2 Pt
— Japan MOF: FY11 All Firm Capex Plans -0.5% Y/Y
— Japan MOF: FY10 All Firm Capex Plans +6.9% Vs Q4 Poll +9.5%
— Japan MOF: FY11 All Capex Ex-Software, Land +6.4%
— Japan MOF: FY10 All Capex Ex-Software, Land +6.7%; Q4 +9.4%
— Japan MOF: FY11 All Firm Current Profit +6.4% Y/Y
— Japan MOF: FY10 All Firm Current Profit +31.1% Vs Q4 Poll +29.7%

TOKYO (MNI) – The business sentiment diffusion index for major
Japanese firms improved to -1.1 points in the January-March quarter from
-5.0 points in the previous quarter, the results of a quarterly
government survey released on Wednesday showed.

In the previous survey released in December, the index for the
first quarter of 2011 was forecast to improve to -0.9 point.

Business sentiment bottomed at -51.3 points in January-March 2009.

The index is computed by subtracting the percentage of companies
reporting deteriorating business conditions from the percentage of those
reporting an improvement. A positive figure indicates the majority of
firms see butter business conditions.

The latest survey also showed that major firms’ sentiment is
expected to rise to + 1.5 percentage point in April-June of 2011
(revised up from +0.8 points seen in the previous survey) before rising
further to +6.2 points in July-September (initial reading).

The survey showed that companies expect their combined capital
spending to rise 6.9% in the current fiscal year ending on March 31 from
a year before, revised down from the 9.5% increase projected in the
previous survey.

Surveyed firms plan to cut combined capital expenditure by 0.5% in
the following fiscal year.

The capex plans are by all firms including those in the financial
sector. Investment in software is included but purchases of land are
excluded from the data.

Manufacturers expect a 11.0% rise in capex during this fiscal year,
down from +12.7% seen in the previous survey, while non-manufacturers
see a 4.8% rise, down from +7.8% projected about three months ago.

Manufacturers plan a 1.6% hike in capex in the next fiscal year,
while non-manufacturers forecast a 1.7% drop in capital outlays.

The survey also showed that companies expect their combined capital
spending excluding software and land to increase 6.7% in fiscal 2010,
down from 9.4% forecast in the previous survey.

The survey showed firms’ current profits for this fiscal year will
rise 31.1% y/y, up from +29.7% forecast in the previous survey, and the
growth is expected to slow to +6.4% in the year to March 2012.

The Finance Ministry and the Cabinet Office conducted the joint
survey on Feb. 15, covering 15,151 companies capitalized at Y10 million
or over, of which 12,153 replied.

tokyo@marketnews.com
** Market News International Tokyo Newsroom: 81-3-5403-4835 **

[TOPICS: M$J$$$,M$A$$$,MAJDS$]