Japan’s manufacturing companies are turning more confident about business conditions after they had become extremely pessimistic earlier this year in the wake of the coronavirus pandemic. BOJ’s Tankan survey for December showed an improvement in business confidence levels among big manufacturers in Japan, with the reading rising to -10 from -27 in November and far better than the -34 reading in June.

The business sentiment came in better than expected, with economists having forecast a rise to -15 instead. While the figure remains in negative territory indicating pessimism, there has been a significant decline in the number of companies who see business conditions as unfavorable with more respondents turning hopeful about an improvement in outlook.

The Japanese government had announced fresh stimulus measures worth $700 billion to offset the economic impact of the pandemic – the third round of financial aid so far this year. In addition to tackling the pandemic’s economic fallout directly, the latest round of stimulus measures also offers funding for projects related to digital innovation and green technology.

Later this week, the BOJ is due to conduct its next monetary policy meeting. Traders widely expect Japan’s central bank to maintain its monetary policy unchanged but the special initiatives to tackle the pandemic’s economic impact could get extended in the wake of the latest wave of fresh infections worldwide.