Japanese big manufacturers' business confidence improved over the three months to December to its highest level in six years, a central bank survey showed, boding well for Prime Minister Shinzo Abe's stimulus policies aimed at ending 15 years of grinding deflation.
But the Bank of Japan's quarterly "tankan" survey showed companies were less optimistic about the outlook and cautious of boosting capital expenditure, highlighting their uncertainty on whether the economy will sustain its momentum.
The headline index for big manufacturers' sentiment improved 4 points from the previous quarter to plus 16, the tankan survey showed on Monday, slightly above a median market forecast of plus 15. It was the fourth straight quarter of improvement and the highest level since December 2007.
The positive reading, which means optimists outnumbered pessimists, underscored the BOJ's view that the economy is recovering moderately and will likely allow it to hold off on expanding stimulus in coming months, analysts say.
Service-sector mood also improved as consumers rushed to beat a sales tax hike next April with the big non-manufacturers' index up 6 points to plus 20, better than a median forecast of plus 16. That was the highest level since December 2007.
But big manufacturers and non-manufacturers both expect business conditions to worsen slightly in the three months to March, the survey showed.
Source: Reuters
