Asia business sentiment rises in Q2,global growth risk still dominates

INDIA: Weakest in 3-1/2 yrs (Index at 63 vs 80 in Q1)

Worries about rising costs continued to weigh on business sentiment in India,pulling the index down to the lowest level since December 2009. Of four respondents,two were positive,one neutral and one negative,the first time a company reported a negative response since the December 2011 survey. Three companies said rising prices were the biggest challenge,while one cited other risks.

Two companies saw rising costs as a worry,while the other two were concerned about currency volatility and global economic uncertainty respectively. Two companies said new orders were higher,while one said sales decreased.

AUSTRALIA: Keeps improving (Index at 75 vs 63 in Q1)

Business confidence among companies continued to improve in the second quarter,driving the sentiment index to its highest level since the first quarter 2012,although more participants were worried about the global economy.

Of the 14 respondents,seven were positive while the other seven were neutral about the outlook. In the previous quarter when there were eight respondents,two were positive and six were neutral. Eleven respondents said world economic uncertainty was their top worry,much more than those in the March survey.

CHINA: Still at all-time low (unchanged at 50)

Corporate sentiment in China remained subdued after a drop in March,as companies worried about global economic uncertainty and rising costs. All 11 respondents were neutral on their business outlook with the index flat at a record low of 50. Five companies said the world economy was their biggest concern,three blamed rising costs and one cited regulatory uncertainty. Three said they saw increased orders while seven said new orders remained the same.

JAPAN: Jumps to 3-yr high (Index at 63 vs 50 in Q1)

Business sentiment in Japan jumped to the highest level in three years,although companies were still worried about the global economic uncertainty environment,volatile currency fluctuations and rising costs.