Mar 31, 9:05 PM EDT

Japan central bank survey finds corporate outlook cautious, capital spending to fall



Multimedia
Archery on horseback still draws crowd
Ainu Rebels reclaim cultural pride
Japanese defend whaling tradition
Japan deals with 'Minimata Disease'
Latest News
Japan central bank survey finds corporate outlook cautious, capital spending to fall

Taiwan to join China-led regional bank, Japan says not now, wants answers on governance

Tokyo's Shibuya ward passes Japan's first ordinance to recognize same sex marriage

Japan extends sanctions against NKorea for 2 years, seeks faster progress in abductions probe

Undeterred by protests, Japan directs climate financing to coal plants in India, Bangladesh

Buy AP Photo Reprints
Multimedia
A district summary of the Beige Book
Measuring economic stress by county nationwide
Mall malaise: shoppers browse, but don't buy
Unemployment by the numbers
Family struggles with father's unemployment
Saying an affordable goodbye
Hard times hit small car dealer
Latest Economic News
Japan central bank survey finds corporate outlook cautious, capital spending to fall

Puerto Rico power company wins extension with creditors amid financial woes

Following signs that oil price falls have bottomed out, eurozone consumer price falls moderate

UK economy grew by 2.8 percent last year _ more strongly than previously thought

Business economists boost 2015-2016 outlook for US economy, cite job growth, consumer spending

Brazil's economy barely avoided recession last year, rising 0.1 percent

US economy lost pace in fourth quarter but approaching almost 6 years of steady expansion

Duration of US economic recoveries since World War II, at a glance

Ethiopia, economy booming, charts a new course with massive projects, sheds famine stereotype

Russia's economy minister predicts new interest rate cut as economy stabilizes

Interactives
Greece's Debt Threatens to Spread
State budget
gaps map
Auto industry problems trickle down, punish Tennessee county
Women give old Derby hats a makeover in tough economy
S.C. town deals with highest unemployment in South
How mortgages were bundled and sold as securities
Tracking the $700 billion financial bailout
Tracking the year's job losses
State-by-state foreclosures since 2007
Credit crisis explained
Presidents and their economic legacies
Lexicon of the financial crisis
Americans' addiction to debt

TOKYO (AP) -- Japanese businesses remain wary over the outlook for the world's No. 3 economy and generally plan to reduce capital investment, according to a central bank survey released Wednesday.

The Bank of Japan's quarterly "tankan" survey will likely reinforce the conviction among many that more stimulus is needed to sustain growth as Japan struggles to escape from more than two decades of stagnation.

The leading measure of business sentiment, based on a survey of 11,126 companies of various sizes, showed more than two-thirds of all companies anticipate further deterioration in conditions, with 83 percent of large manufacturers branding conditions "not so favorable" or "unfavorable."

Japanese businesses anticipate weak demand both at home and overseas for their products and higher costs for materials thanks to the weakening Japanese yen.

The economy emerged from a half-year recession last year following a sales tax hike that dented consumer and corporate demand. But growth has remained weak.

The latest tankan shows companies plan to reduce capital spending by nearly 5 percent in this fiscal year, which ends March 31, 2016. The companies expect to cut spending on land purchases by nearly 37 percent.

The central bank has been pumping trillions of yen (tens of billions of dollars) into the economy through asset purchases aimed at keeping interest rates low and stimulating inflation. Prime Minister Shinzo Abe and others in his government say they expect the strategy to stimulate a "virtuous cycle" of spending and investment.

BOJ Gov. Haruhiko Kuroda expanded those purchases last fall to counter the recession, and is facing calls for still more stimulus. But Kuroda and many other economists say monetary easing and government spending alone cannot fix Japan's problem with weakening demand, due to its aging and declining population.

The reflationary efforts have weakened the yen, driving up costs for imports of food, energy and many industrial components and materials used by manufacturers. Those rising costs, along with the 3 percentage-point tax hike a year ago, have so far undermined purchasing power without stimulating a rush to spend more.

Annual labor negotiations wrapped up last month with larger-than-usual wage increases for union employees of many of the largest companies, but overall they account for a minor share of the workforce, and incomes have continued to fall over the past several years.

© 2015 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed. Learn more about our Privacy Policy and Terms of Use.