Japan business mood worsens - BOJ tankan

TOKYO: Japanese manufacturers' business sentiment worsened for the first time in nearly two years in the three months to December, a Bank of Japan survey showed, as they felt the pinch from a strong yen and slowing exports, according to a Reuters report on Wednesday, Dec 15.

The headline index measuring big manufacturers' sentiment was plus 5 in December, worsening from plus 8 in September though above a median market forecast of plus 3. It was the first deterioration in sentiment in seven quarters.

The index for March next year was seen at minus 2, showing that companies expect business conditions to worsen over the next three months.

The tankan survey for the three months to December also showed big firms plan to increase capital spending at a slightly faster pace than expected in the year to March 2011.

Big firms plan to raise their capital spending by 2.9 percent in the current business year to March 2011, more than the market's median forecast for a 2.7 percent rise, the survey showed.

The sentiment indexes are derived by subtracting the percentage of respondents who say conditions are poor from those who say they are good. Negative readings mean pessimists outnumber optimists. - Reuters