AFP - Japanese business confidence has weakened for the first time in nearly two years, the Bank of Japan says, with the economy hit by a soaring yen and global economic uncertainty.
The key quarterly Tankan survey showed that the sentiment index among major manufacturers dropped to "five" from "eight" in September, as global economic woes have sapped confidence, particularly of exporters.
It is the first fall in business confidence in seven quarters but is slightly better than market expectations, which forecast a reading of three.
The reading of five means that there are more optimists than pessimists among major manufacturers in terms of their view of Japan's economic climate, but the gap is narrowing. The closely watched survey reaches more than 11,000 firms.
Japan, which heavily relies on exports for growth, has faced increasingly gloomy economic forecasts, as a strong yen and waning overseas demand have weakened global appetite for Japanese goods.
A strong yen makes Japan's exports more expensive and erodes companies' overseas profits when repatriated, with many firms considering sending more production overseas as a result.
Recent data have indicated that the Japanese corporate sector has started reducing capital investment on fears that Japan's economic climate will deteriorate further in months ahead.
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