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TOKYO, July 17 (Reuters) - Japanese manufacturers' business
sentiment hit a fresh five-year low in July as companies felt the
pinch from surging energy and raw materials costs and sluggish
demand, a Reuters survey showed on Thursday.

The Reuters Tankan, a monthly survey of leading Japanese
firms that tracks the Bank of Japan's closely watched tankan
quarterly corporate survey, produced an index of minus 10 in July
for manufacturers, down from minus 2 in June.

It was the lowest reading since April 2003 when it was at
minus 11, the survey taken from June 27 to July 14 showed.

The sentiment index for the country's service sector edged
down to minus 3 -- the lowest since December 2003 -- from minus 2
the previous month.

Following is a table of indexes for key sectors and a
comparison with the BOJ's tankan survey:

OCT JULY JUNE MAY
APR MAR FEB

(f'cast)
=============================================================================
MANUFACTURERS ( -3) -10 -2 -2

+1 +8 +9
-----------------------------------------------------------------------------
(Materials) (-13) -18 -7 -6

-5 -3 +3
- Textile/paper (-10) -30 -10 -10
-18 -22 -29
- Chemicals (-11) -11 0 0

0 +5 +18
- Oil refinery/ceramics (-29) -29 -18 -20

-9 -11 -20
- Steel/nonferrous metals ( 0) 0 0 0
+20 +17 +20
(Manufactured products) ( +3) -5 0 +1

+5 +14 +13
- Food (-11) -11 +13 +13
+11 +11 +13
- Metal products/machinery ( 0) -13 -14 -5

+5 +16 +5
- Electric machinery (+14) +14 +13 0

0 +8 +13
- Autos/transport equipment ( 0) -25 +11 -14
+10 +22 +22
- Precision machinery/others ( 0) -9 -18 +18

+8 +20 +18
=============================================================================
NON-MANUFACTURERS ( 0) -3 -2 0

+3 +2 +2
-----------------------------------------------------------------------------
- Real estate/construction (-15) -19 -29 -20
-19 -12 -18
- Retail/wholesale ( -6) -6 -3 0

0 +3 -9
+ Wholesalers ( 0) 0 +14 -7

+7 -7 -13
+ Retailers (-11) -11 -15 +5

-6 +12 -5
- Information/communications (+20) +10 0 +22
+22 +10 +20
- Transport/utility ( 0) +15 +23 +12
+25 +17 +20
- Other services (+11) 0 +4 0

+4 0 +15
=============================================================================
*** COMPARISON WITH BANK OF JAPAN TANKAN ***
=======================================================

MANUFACTURERS NON-MANUFACTURERS

RTRS BOJ RTRS BOJ
-------------------------------------------------------
OCT (Forecast) -3 - 0 -
SEP (Forecast) - +4 - +8
- - - - - - - - - - - - - - - - - - - - - - - - - - - -
JULY -10 - -3 -
JUNE -2 +5 -2 +10
MAY -2 - 0 -
APR +1 - +3 -
MAR +8 +11 +2 +12
FEB +9 - +2 -
JAN +17 - +1 -
DEC (2007) +21 +19 +13 +16
NOV +23 - +9 -
OCT +21 - +19 -
SEP +24 +23 +14 +20
AUG +30 - +14 -
JUL +28 - +19 -
JUN +31 +23 +16 +22
MAY +29 - +21 -
APR +28 - +26 -
MAR +28 +23 +23 +22
FEB +30 - +20 -
JAN +35 - +23 -
DEC (2006) +34 +25 +21 +22
NOV +34 - +22 -
OCT +34 - +20 -
SEP +30 +24 +20 +20
AUG +30 - +22 -
JUL +35 - +24 -
JUN +39 +21 +20 +20
MAY +35 - +23 -
APR +34 - +24 -
MAR +25 +20 +16 +18
FEB +34 - +17 -
JAN +33 - +22 -
DEC (2005) +32 +21 +20 +17
NOV +27 - +21 -
OCT +15 - +25 -
SEP +20 +19 +19 +15
AUG +16 - +17 -
JUL +16 - +18 -
JUN +20 +18 +17 +15
MAY +23 - +16 -
APR +18 - +16 -
MAR +18 +14 +16 +11
FEB + 9 - +19 -
JAN +17 - +15 -
DEC (2004) +15 +22 +14 +11
NOV +21 - +19 -
OCT +19 - +19 -
SEP +26 +26 +20 +11
AUG +30 - +27 -
JUL +28 - +17 -
JUN +27 +22 +15 +9
MAY +31 - +10 -
APR +23 - +12 -
MAR +21 +12 +6 +5
FEB +15 - +4 -
JAN +4 - +1 -
=======================================================
***ADDITIONAL QUESTIONS***
Q2. Where do you expect the Nikkei to be at the end of August?

AVERAGE HIGHEST LOWEST
OVERALL 13,722 15,000 11,250
MANUFACTURERS 13,809 15,000 12,500
NON-MANUFACTURERS 13,629 15,000 11,250
---------------------------------------------------------------------------
Q3. Where do you expect the dollar/yen exchange rate to be at
the end of August?

AVERAGE HIGHEST LOWEST
OVERALL 106.34 110.58 100.00
MANUFACTURERS 106.29 110.03 100.00
NON-MANUFACTURERS 106.39 110.58 100.00
---------------------------------------------------------------------------
Q4. Where do you expect the 10-year Japanese government bond
yield to be at the end of September? (percentage of respondents)

below 1.0- 1.2- 1.4- 1.6- 1.8-

2.0- over

1 % 1.2% 1.4% 1.6% 1.8% 2.0%

2.2% 2.2%
---------------------------------------------------------------------------
OVERALL 1 1 6 21 54 14

1 1
MANUF'S 0 3 6 19 52 18

2 1
NON-MANUF'S 2 0 7 22 57 10

1 1

The Reuters Tankan covers 200 manufacturers and 200
non-manufactures. A total of 216 responded to the first question
between June 27 and July 14.

Formerly known as the Telerate Tankan, it was renamed after
the acquisition of Quick Moneyline Telerate Corp by Reuters Group
Plc RTR.L.
(Reporting by Shigeo Kodama, Writing by Tetsushi Kajimoto)