Japanese big makers' business confidence down

Business confidence among major Japanese manufacturers in the July-September period slightly worsened from the previous three months, the Bank of Japan (BOJ) said Monday.
The central bank's quarterly survey showed the business sentiment index among big makers dropped to plus 12 points, compared with plus 13 points in the September poll, marking the first fall in two quarters.
The index represents the percentage of companies which are positive about their business minus the percentage of those who gave negative replies. Thus, a positive number means optimists still outnumber pessimists.
The central bank's "tankan," which means short-term economic outlook, is the world's third-largest economy's most closely watched index of business confidence.
The downturn is attributed to higher import costs due to the weaker yen. But confidence among large retailers, banks, real estate companies and other non-manufacturers gained three points to plus 16, the first improvement in three quarters, thanks to strong sentiment by accommodations, food and beverage service sectors.
The survey showed big companies in both manufacturing and non-manufacturing sectors plan to boost their capital spending on plants and equipment by 8.9 percent in fiscal 2014 through next March from the previous year, higher than an estimated increase of 8.6 percent in the September poll. Looking ahead, both major companies are cautious in their outlook in the next three months. Large manufacturers expect the index to further fall three points to plus nine in the next survey in March, while large non-manufacturers predict the index to worsen 1 points to plus 15, the central bank said. According to the BOJ, big manufacturers anticipated that the US dollar will average JPY 103.36 in fiscal 2014 compared with their previous projection of JPY 100.73.
The weak yen benefits exporters, such as automakers and industrial machinery makers, as it boosts export profitability by making Japanese products cheaper overseas. The latest survey was conducted between Nov. 12 and Dec. 12, covering 10,312 companies, of which 97.9 percent responded. The report came as Japan's economy contracted in the July-September period for the second straight quarter due to weak corporate capital spending, with the government confirming the nation has slipped into recession.