Confidence among Japanese manufacturers slipped in November from a decade high seen the previous month, a Reuters poll showed.
But the manufacturing confidence remained strong - underscoring the third-largest economy of the world is continuing its expansion, the poll showed.
The Reuters Tankan, which tracks the Bank of Japan’s closely-watched tankan quarterly survey, also found service-sector firms’ sentiment edging up, a further sign of broadening recovery.
Yuichiro Nagai, economist at Barclays Securities said, “We expect the BOJ tankan sentiment index in December to exceed company projections at the time of the September survey.”
The latest survey results bolster the argument that Japan’s economy, is gathering momentum from its brisk export performance and firmer domestic demand.
The poll of 547 large- and mid-sized companies, in which 255 firms responded, was conducted Oct. 26 to Nov. 7.
The sentiment index for manufacturers fell to 27 from a decade-high of 31 in October.
Sentiment deteriorated sharply among producers of industrial materials such as refined oils and chemicals, likely reflecting worsening terms of trade due to a weakening yen and rising oil prices.
Japan’s economy expanded at an annualised 2.5 per cent in the second quarter as consumer and corporate spending picked up, with steady growth likely to be sustained in coming quarters.
BOJ policymakers hope a sustained economic recovery will boost wages and consumer spending, but analysts expect inflation to remain below the central bank’s 2.0 per cent target for some time.
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