Business sentiments in Japan improving despite Iran worries

The improvement in the key so-called diffusion index in the closely watched tankan report, recorded for the fourth quarter straight, comes even as worries grow about Japan’s economic growth and oil supplies because of the war in Iran. Analysts say the Bank of Japan may start to raise interest rates because of concerns about inflation, given the soaring energy costs and declining yen — two elements that greatly affect living costs for the average Japanese consumer. But in recent years, a weak yen is working as a negative, as resource-poor Japan imports much of its energy, as well as other key products such as food and manufacturing components.