World and Nation

Japan business conditions sink as post-disaster devastation remains

HONG KONG — The devastating natural disasters that struck Japan last month have caused widespread concern about business conditions in coming months among Japanese companies, according to survey results released Monday by the Japanese central bank.

The data is a subset of a wider, closely watched business sentiment survey, the Tankan, which is conducted quarterly by the Bank of Japan and was released Friday.

In an unusual step, the bank stripped out responses returned before the earthquake and tsunami that struck March 11 from those received after that date, in an effort to gauge how sentiment had shifted in the wake of the twin disasters.

The postquake Tankan results released Monday showed large manufacturers, which are the most closely watched by economists and investors, turning negative in their outlook for the next three months, with a reading of minus 2. Answers received from those who replied before the quake made for a reading of plus 3. A negative number means pessimists outnumber optimists.

Small and medium-size businesses, which tend to be more reliant on the domestic economy, had been negative even before the quake. They turned even more nervous after the disaster, the data released Monday showed.

Economists cautioned that the data probably underestimated the effect of the disasters and of the nuclear crisis that has unfolded at the Fukushima Daiichi power plant since then. The Bank of Japan also stressed that the relatively small number of responses that came in after March 11 meant that the results probably did not fully reflect the shift in sentiment.

Still, the data give one of the clearest pictures available so far of the effect that the disasters have had on business confidence in the world’s third-largest economy, after those of the United States and China.

Aside from the human toll and the damage directly caused by the quake and tsunami in the country’s northeast, the disasters have caused considerable disruption to businesses elsewhere in the country by knocking out part of Japan’s power-generation capacity.

Numerous manufacturers have had to idle plants because of power cuts and disruption to supply chains, especially in the electronics and automobile sectors.

Many economists believe overall industrial production slumped by more than 10 percent in March, compared with February, and that the effects of the quake and power shortfalls are likely to be felt for several months.