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Japan manufacturers' mood up; outlook weak: Reuters Tankan
[TOKYO] Japanese manufacturers grew more confident for the first time in three months but expect conditions to worsen again, a Reuters poll showed, underscoring a cautious economic outlook even as the Bank of Japan takes fresh steps to bolster growth.
Sentiment among service companies slid for the second straight month to its lowest in a year, the Reuters Tankan showed, as retailers continued to feel the pain from a sales tax hike in April.
The monthly survey, which closely tracks the Bank of Japan's influential tankan quarterly poll, comes as news reports say Prime Minister Shinzo Abe will delay a planned second tax hike to cushion the economy and call a general election.
Japanese companies overwhelmingly want Abe to delay or even scrap the tax hike out of concern it will derail the recovery, a Reuters Corporate Survey showed.
The April tax hike pushed Japan into its worst decline since the global financial crisis in the second quarter. Abe has said he will look at third-quarter GDP, due out Monday, before deciding whether to proceed with the planned October 2015 tax increase.
The Reuters poll canvassed 486 big firms, of which 264 replied from Oct 27 to Nov 10. The results do not fully reflect the BOJ's Oct 31 monetary easing, which stunned markets, pushing up Tokyo shares and weakening the yen.
The sentiment index for manufacturers in the Reuters Tankan rose to 13 in November from 8 in October, but they expect a drop back to 9 in February. "Orders are losing momentum from October likely because our client manufacturers are increasingly putting off investments, feeling that a decline in demand after the tax hike will be prolonged," said an executive at an electric machinery firm.
The last BOJ tankan showed big Japanese manufacturers grew slightly more optimistic in the third quarter but service-sector sentiment dipped.
The Reuters Tankan service-sector index fell to 18 in November from 20 in October, matching a low last seen in October 2013. It is forecast to improve to 22 in February.
The survey indices represent the difference between the percentage of firms saying conditions are improving and those who say they are worsening. A positive number means optimists outnumber pessimists.