Japan manufacturer mood at 2-yr high-Reuters Tankan

(For tables, click on [ID:nTOE65F02N])

* Improved corporate mood points to stronger BOJ tankan

* Recovery spreads to service-sector firms

* Manufacturers worried by Europe debt problems

By Izumi Nakagawa

TOKYO, June 17 (BestGrowthStock) – Japanese manufacturers are more
optimistic about economic conditions than they have been in over
two years, a Reuters poll showed, as strong exports to
fast-growing Asia continue to drive economic recovery in the
country.

In a sign the pick-up is filtering into a broad range of
sectors, non-manufacturers were far less pessimistic than three
months earlier and they expected their sentiment to turn positive
in the next three months, the poll showed.

But many manufacturers in export-reliant industries
complained about the impact from Europe’s debt problems and the
consequent fall in the euro against the yen, as a stronger yen
hurts the competitiveness of their products abroad.

Still, the poll, which has a 95 percent correlation with the
Bank of Japan’s tankan survey, showed manufacturers expect their
sentiment to improve further over the next three months.

The BOJ’s influential quarterly tankan business sentiment
survey next comes out on July 1. [JPBCLG=ECI] [JPBCLN=ECI]
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Graphic on Reuters, BOJ surveys: http://r.reuters.com/fyg32m
More stories on Japan economy [ID:nECONJP]
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The manufacturers’ sentiment index in the Reuters Tankan rose
17 points from March to plus 9, its highest level since February
2008. The index is expected to climb a further five points to
plus 14 in September.

The index for non-manufacturers improved to minus 8 from
minus 22 in March and is expected to rise to plus 5 in September,
with retailers, whose sentiment hit a record low in December,
showing a marked improvement.

Business sentiment improved in almost all manufacturing
sectors, the Reuters Tankan survey of 400 large firms, of which
226 responded, showed.

“Since spring last year, earnings have improved rapidly and
the level of order receipts has recovered to near an all-time
high. But production has not been catching up with the sharp
growth in orders,” a machinery maker said.

Japan’s economy grew 1.2 percent in January-March, outpacing
growth in the United States and Europe, thanks to brisk exports
to fast-growing Asian economies. [ID:nTOE658045]

Economists expect growth to slow in the following quarters as
government stimulus targeting the consumption of energy-efficient
products fades and as European debt woes cloud the outlook.

“Although orders are coming in as expected, the yen’s
appreciation against the dollar and the euro is not favourable in
terms of profitability,” an electric appliance maker said.

The Reuters Tankan indexes are calculated by subtracting the
percentage of pessimistic respondents from optimistic ones. A
negative figure means pessimists outnumber optimists.

The survey was carried out between May 28 and June 14.

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(Writing by Rie Ishiguro; Editing by Joseph Radford)

Japan manufacturer mood at 2-yr high-Reuters Tankan