TOKYO: Confidence at
Japanese manufacturers rose to its highest level in a decade in August led by
materials producers, a Reuters poll showed, a further sign of broadening
recovery in the economy.
The Reuters' monthly poll - which tracks the Bank of
Japan's closely watched quarterly tankan - found the service-sector mood fell
but still remained at a relatively high level, underscoring firmness in
domestic demand which drove an expansion in the second quarter.
Business sentiment was likely to sag slightly over
the next three months, indicating a potential pullback from the hefty 4 percent
annualised growth in the April-June quarter driven by private consumption and
capital expenditure.
The sentiment index for manufacturers rose one point
to 27 in August in the poll of 548 large- and mid-sized companies, conducted
Aug. 1-16, in which 265 firms responded.
It was the best reading since August 2007, just
before the last global financial crisis.
"The global economy, centring on the United
States and China, is on a firm footing," a manager of a textile maker
wrote in the survey.
Reflecting some wariness on the outlook, the
manufacturers' index was seen slipping to 26 in November.
"While China's car market remains brisk, North
American markets appear to have reached the peak. As such, we cannot be overly
optimistic," wrote a manager at a car manufacturer.
The Reuters Tankan service-sector index slipped to
29 in August from the previous month's two-year high of 33, dragged down by
retailers, information and communications firms.
The index was expected to drop further to 25 in
November.
Cool and rainy weather may dampen consumer spending
in August, which would be worrying as private consumption constitutes about 60
percent of the economy and was a primary driver of the second-quarter's robust
expansion.
The Reuters Tankan indexes are calculated by
subtracting the percentage of pessimistic respondents from optimistic ones. A
negative figure means pessimists outnumber optimists.
The BOJ's last tankan out July 3 showed big
manufacturers' business confidence hit its highest level in more than three
years in the June quarter.
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