Japanese business sentiment worsened for a second straight quarter in the three months to December and will barely improve early next year, a central bank survey showed, as the global slowdown and a territorial row with China hit the export-reliant economy.
The dismal reading heightens the case for the Bank of Japan, already under intense political pressure for bolder action ahead of Sunday’s general election, to ease monetary policy further next week to support an economy already in recession.
“Both manufacturers and non-manufacturers were worse than expected. Declines in exports are hurting manufacturers, but for non-manufacturers, the numbers show that the benefits of reconstruction spending are starting to fade,” said Shuji Tonouchi, senior fixed income strategist at Mitsubishi UFG Morgan Stanley Securities in Tokyo.
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