Business sentiment among manufacturing firms in Japan surged into positive territory, indicating optimism, for the first time in almost two years during the month of February. The recent Reuters Tankan poll reveals that the manufacturers’ sentiment index rose to +3 in February from -1 in January, turning positive for the first time since July 2019.

The poll also indicated that firms expected an improvement in the sentiment over the coming three months. However, respondents remain cautious that demand could be impacted adversely, causing business conditions to weaken all over again, especially among consumers.

Manufacturers were upbeat about the current state as it indicated stability in the markets over hopes of a recovery in global economic conditions. The pick-up in business sentiment index was driven mainly by optimism among chemicals’ and manufactured goods’ firms.

Meanwhile, the non-manufacturers’ index continues to remain in negative territory, with the mood still pessimistic. However, there was a slight improvement with the index rising to -7 in February from -11 in January.