The recently released December Tankan (Short-Term Economic Survey of Enterprises in Japan) shows that firms are projecting growth in their current profits for the fifth consecutive year since fiscal 2002 and the ratio of current profits to sales is exceeding the peak reached in the bubble era.
In this situation, business sentiment continues to be favorable and firms are planning to increase fixed investment for the fourth consecutive year. Moreover, their projections of both current profits and fixed investment for fiscal 2006 have been revised upward from the September Tankan.