By Megumi Fujikawa
TOKYO--A key gauge of business sentiment in Japan improved for a fourth straight quarter even as companies continue to assess the impact of war in the Middle East on their businesses.
The index measuring sentiment among large manufacturers was +17 in the Bank of Japan's tankan survey released Wednesday, up from +16 in the December reading and at par with the +17 expected in a poll of economists by data provider Quick.
The gauge represents the percentage of companies that said business conditions were favorable minus those that said conditions were unfavorable.
Reflecting solid corporate earnings, Japanese corporations will continue to make steady investments in the new fiscal year that started on April 1, the tankan showed. Large firms plan to increase capital expenditure by 3.3% in the current business year, compared with the 10.9% rise planned in the previous year.
Companies usually raise their capex plans later in the year after gaining more clarity about their business conditions.
However, the survey showed that companies are cautious about the outlook, with the index measuring large manufacturers' confidence in their business prospects for the three months ahead declining to +14.
The pullback highlights the difficulty in predicting the outcome of the Middle East conflict, including the economic impact of surging crude prices and supply chain disruptions.
Write to Megumi Fujikawa at megumi.fujikawa@wsj.com
(END) Dow Jones Newswires
03-31-26 2041ET
