July 2, 2018 / 12:32 AM / 5 months ago

UPDATE 1-Japan manufacturers' mood worsens as trade disputes cloud outlook -BOJ tankan

(Adds detail, background)

* Big manufacturers’ sentiment index at plus 21 vs forecast +22

* Service-sector sentiment at plus 24 vs forecast +23

* Manufacturers’ mood seen flat ahead, service-sector down

* Big firms see capex to rise 13.6 pct FY2018 vs forecast +9.3 pct

By Tetsushi Kajimoto and Stanley White

TOKYO, July 2 (Reuters) - Business confidence among Japan’s big manufacturers’ worsened for a second straight quarter in the three months to June, a closely watched central bank survey showed, as rising input costs and U.S. trade protectionism cloud the outlook.

The Bank of Japan’s quarterly “tankan” survey out on Monday showed the headline index for big manufacturers’ sentiment at plus 21 in June, versus plus 24 three months ago and down for a second straight quarter.

It was the first time since Prime Minister Shinzo Abe was elected in December 2012 that manufacturers’ mood has soured for two quarters in a row.

The headline index undershot the median estimate of plus 22 in a Reuters poll of analysts, and is expected to stay flat over the next three months, it showed.

The central bank will scrutinise the tankan results at its rate review later this month, at which its nine-member board will conduct a quarterly audit of its long-term growth and price outlook, and analyse factors behind subdued inflation.

Japan’s economy is expected to rebound in the second quarter from a contraction in the first quarter that ended the longest growth streak since the 1980s bubble economy. And risks to the export-reliant economy abound, not least from a heated China-U.S. trade dispute that has roiled financial markets.

Policymakers worry that trade friction and potential gains in the safe-haven yen could undermine export-led growth.

Non-manufacturers’ sentiment stood at plus 24 in June, slightly above a median forecast of plus 23, up one point from the previous quarter. It was seen worsening to 21 in September.

The survey also showed big firms plan to raise their capital spending by 13.6 percent in the financial year from April 2018, handily beating economists’ median estimate of a 9.3 percent gain.

Economists expect capital expenditure will be backed by demand for upgrading ageing production capacity, investment in robots and automation to cope with labour shortages, and an infrastructure boom ahead of the Tokyo Olympic Games in 2020.

The tankan’s sentiment indexes are derived by subtracting the number of respondents who say conditions are poor from those who say they are good. A positive reading means optimists outnumber pessimists. (Reporting by Tetsushi Kajimoto Editing by Eric Meijer)

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below