The Bank of Japan building in Tokyo. Can its fortress walls hold? Photo: AFP / Kazuhiro Nogi

Confidence among major Japanese manufacturers has recovered marginally after plunging on pandemic woes to its worst level since the global financial crisis, a key survey showed Thursday.

The Bank of Japan’s September Tankan business survey – a quarterly poll of about 10,000 companies – showed a reading of minus 27 among big manufacturers, after recording minus 34 in the previous survey in June.

The latest figure compared with a market consensus of minus 24.

The June figure was the lowest since June 2009 when worldwide financial shocks hammered the planet’s third-largest economy.

The modest recovery “has mainly been driven by an improvement in the Japanese economy, which has been gradually returning to normal following the lifting of the state of emergency in the country and the end of lockdowns in other major nations,” Naoya Oshikubo, senior economist at SuMi TRUST, said in a commentary.

“However, a global – and consequently Japanese – recovery may be hampered by a second wave of Covid-19,” he warned ahead of the release of the survey.

Japan was struggling with the effects of natural disasters and a hike in consumption tax even before the pandemic crippled the global economy.

Once it hit, there were no mandatory lockdowns in the country, the government instead asking people to stay at home – requests that were largely heeded.

But that, coupled with a shuttering of the country’s borders, battered tourism and consumer spending, with the hospitality industry hit particularly hard.

Confidence among big non-manufacturers improved to minus 12 – against a market consensus of minus 9 – after plummeting to minus 17 in June from plus 8 in March.