Japan manufacturers' mood sags amid global uncertainty - Reuters Tankan
Japanese manufacturers` confidence worsened for the first time in four months in September from the previous month`s decade-high level and was expected to fall further, weighed by global uncertainty, a Reuters poll showed.
The monthly poll - which tracks the Bank of Japan`s closely watched quarterly tankan - found the service-sector mood had its best reading in more than two years, adding to recent signs of recovery in private consumption.
Compared with three months ago, the Reuters Tankan`s sentiment indexes for manufacturers and service sector firms held largely unchanged, pointing to a steady reading in the central bank`s upcoming tankan due on October 2.
Firm tankan results would support the BOJ`s upbeat view on Japan`s economy, which is expected to continue moderate growth after posting its sixth straight quarter of expansion through June.
The BOJ`s last tankan showed big manufacturers` business confidence hit its highest level in more than three years in the June quarter.
However, the Reuters Tankan sentiment index was seen sliding over the next three months, reflecting uncertainty over the U.S. and Chinese economies - Japan`s key trading partners - as well as risks such as North Korea`s missile launches and nuclear weapons programme.
"Our domestic clients are being cautious about capital spending due partly to anxiety about future prospects for Abenomics," wrote a manager of a machinery producer, referring to Prime Minister Shinzo Abe`s reflationary policy. "Capital spending is being put off overseas as well due to uncertainty on the recovery prospects for Europe, America and China."
Another machinery maker wrote in the survey, in which companies respond anonymously: "While special demands for industrial equipment related to smartphones have subsided, sales of home apparatus are seesawing due to the murky global outlook."
The sentiment index for manufacturers fell two points to 25 in September in the poll of 548 large- and mid-sized companies, conducted Aug. 30-Sept. 12, in which 268 firms responded. The index was down one point versus June, dragged down by producers of industrial materials such as oil and steel.
The Reuters Tankan service-sector index rose five points to 34, marking the best reading since June 2015, led by retailers and information and communications firms. The index has risen one point from three months ago.
The manufacturers` and service-sector indexes were expected to fall to 21 and 28 respectively in December.
"The domestic market is dwindling and consumption has not livened up with consumers tightening their purse strings," a manager at one manufacturer noted. "It will take more time to shake off the deflationary mindset."
(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)
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