Three prefectures in northeast Japan ravaged by the Great East Japan Earthquake reported sharp falls in business confidence in the Bank of Japan's June Tankan survey.
Three prefectures in northeast Japan ravaged by the Great East Japan Earthquake reported sharp falls in business confidence in the Bank of Japan's June Tankan survey.
Business confidence among small, medium and large manufacturers in Iwate Prefecture fell 34 points on the "diffusion index" to minus 25.
Confidence fell 14 points to minus 33 in Miyagi Prefecture and 8 points to minus 22 in Fukushima Prefecture.
All three prefectures' indexes were below the national average of minus 15 points.
The diffusion index is calculated by subtracting the percentage of companies reporting unfavorable business conditions from the percentage of companies reporting favorable conditions.
The latest survey was conducted between May 30 and June 30, and is the first to fully reflect the impact of the March 11 earthquake and Fukushima nuclear disaster. Many companies surveyed in the previous Tankan survey, conducted between February and March, responded before the quake.
All three disaster-affected prefectures expect a rise in optimism over the next three months. The prefectures are forecasting increases of 9 points to 17 points in the next survey in September.
The return of major companies to normal production in summer is expected to provide a major boost to confidence in the region. The national index is predicted to rebound by 7 points in the same period.
However, the predictions for the next quarter reveal significant variations in mood between quake-hit prefectures. Miyagi Prefecture forecast the diffusion index in the third quarter at minus 24, while Fukushima Prefecture expected a score of minus 8.
"The proportion of land devastated by the disaster is larger in Miyagi Prefecture than in the other prefectures," Kazuo Fukuda, general manager of the BOJ's Sendai Branch, told a news conference July 1.
But Fukushima Prefecture's business confidence could worsen if Tokyo Electric Power Co. fails to make substantial progress in containing the crisis at the Fukushima No. 1 nuclear power plant.
Meanwhile, labor ministry figures revealed severe problems for prospective high school graduates seeking jobs in the disaster zone.
Between June 20 and June 24, the ministry's Hello Work job placement offices handled only 297 job offers for high school students graduating next spring in Fukushima Prefecture, down from 504 a year earlier.
The office in Soso, Fukushima Prefecture, which includes the exclusion zone around the Fukushima No. 1 plant, had only three job offers, as opposed to 62 last year.
"With the prospects for containing the nuclear crisis, local businesses are having difficulty predicting the course of local reconstruction and deciding on their employment plans," said an official at the ministry's Fukushima Labor Bureau.
In Miyagi Prefecture, there were only 486 job offers compared with 676 over the same period last year.
Job offers in Iwate Prefecture actually rose to 416 from 345, partly because local governments urged business organizations in the prefecture to give early job offers. Reconstruction-related demand in inland areas also helped.
But Rikuzentakata and Ofunato, which were severely affected by tsunami, had no job offers during the five-day period.
"We are likely to see a slowing of job offers," an official at the ministry's Iwate Labor Bureau said.