TOKYO (Reuters) - Confidence among Japanese manufacturers rose for a sixth straight month in February to a 2-1/2 year high but the service sector’s mood fell for the first time in four months, a Reuters poll showed, underscoring the export-led nature of the economic recovery.
The Reuters’ monthly poll - which tracks the Bank of Japan’s key quarterly tankan - found confidence at manufacturers slipping over the next three months and service-sector firms holding steady.
In the poll of 531 large- and mid-sized firms, conducted between Jan. 31 and Feb. 14 in which 255 responded, the sentiment index for manufacturers rose to 20 from 18 in January, led by steel/nonferrous metals, chemicals and electric machinery.
It was the highest reading since August 2014, and is expected to drop to 19 in May.
The Reuters Tankan follows data this week that showed Japan’s economy grew moderately in October-December driven by exports, but tepid private consumption and uncertainty over policies of U.S. President Donald Trump cloud the outlook.
“The yen’s weakening since Trump’s election has brightened business sentiment. But what he says and does could make companies cautious about the future,” a manager at a electric machinery firm wrote in the survey, which companies answer anonymously.
The manager said Trump may turn up the heat against a weak yen and Japanese car exporters, although the president held off from criticizing Japan’s trade surplus with the United States during a meeting with Prime Minister Shinzo Abe last week.
The Reuters Tankan service-sector index fell to 26 in February from a 1 1/2-year high of 30 in the previous month.
It was the first decline in four months, dragged down by retailers and wholesalers, underlining fragility in the private consumption that constitutes about 60 percent of the economy.
The Bank of Japan’s last tankan in December showed sentiment among big Japanese manufacturers improved for the first time in six quarters to hit a one-year high, as a weak yen and a pick-up in global demand brightened prospects for exporters.
In a quarterly review of its forecasts issued last month, the BOJ raised its growth estimates for the fiscal year beginning in April to 1.5 percent from the 1.3 percent forecast in November, nodding to brightening prospects for exports.
Data on Monday showed Japan’s economy, the world’s third-largest, grew an annualised 1.0 percent in October-December, following a revised 1.4 percent expansion in July-September. It was the fourth straight quarter of expansion.
Reporting by Tetsushi Kajimoto; Editing by Eric Meijer