[TOKYO] Confidence among Japanese manufacturers held steady for a second straight month in July and is seen likely to edge up, a Reuters poll found, offering further evidence of sentiment gradually recovering from April's sales tax hike.
Reflecting weak private consumption, the service-sector mood including retailers slid in July, but it is seen rebounding over the next three months, according to the Reuters Tankan poll of 400 big firms between June 30 and July 14, of which 280 replied.
The Reuters Tankan, which closely correlates with the Bank of Japan's key tankan survey, supports the central bank's view that the economy is on track for a moderate recovery.
However, the lack of a growth engine clouds the economic outlook, with companies expressing their concerns about a big drop in demand after the April 1 sales tax hike and stagnant exports - particularly to China. "Our sales dropped more than expected in May and June in reaction to the sales tax hike. The Chinese market remains sluggish as well," a chemicals firm said in the Reuters poll. "The US economy is firm but the world economy on the8 whole lacks momentum, particularly with the Chinese economy likely to remain sluggish for a long time," a nonferrous metal firm said.