Tankan likely to signal only an anaemic recovery

The Bank of Japan’s Tankan survey for March (to be released on Monday) will probably show that large manufacturers thought business conditions were less negative in the first quarter and might even turn marginally positive in the second. This would be a recovery of sorts, although still lacklustre. However, the main focus this week will of course be on the Bank’s Policy Board meeting (which concludes on Thursday). We expect the Board to announce only small policy changes now, with any more substantial reforms on hold for the second April meeting on the 26th.