Japan business mood mixed in export-led recovery: Reuters Tankan

Thu Feb 16, 2017 6:09pm EST
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By Tetsushi Kajimoto and Izumi Nakagawa

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.   Continued...

Newly manufactured cars await export at port in Yokohama, Japan, January 16, 2017. Picture taken January 16, 2017.  REUTERS/Toru Hanai