UPDATE 2-Japanese firms more wary, rate hike seen on hold
(Adds government measures on high oil prices)
By Yuzo Saeki
TOKYO, Dec 25 (Reuters) - Big Japanese firms were less confident about conditions in the three months to December than in the previous quarter, a government survey showed on Tuesday, suggesting rising oil prices and financial market volatility were hurting corporate sentiment.
The data did little to alter a view in markets that the central bank will delay raising interest rates until well into next year in light of financial market uncertainty and eroding growth prospects for Japan's economy.
The government announced a package of measures on Tuesday to cushion the impact of high oil prices. It will spend 215 billion yen ($1.89 billion) on measures such as cutting highway tolls and financing help for small firms.
The Bank of Japan last week kept its key policy rate unchanged at 0.5 percent, with its governor acknowledging that underlying economic growth is slowing. [ID:nT136686]
Economists said Tuesday's survey was in line with the closely watched Bank of Japan tankan issued on Dec. 14, pointed to deteriorating business sentiment.
"The survey showed companies have turned very cautious given uncertainty over the U.S. economy and markets as well as rises in costs that they cannot fully reflect in prices of their products due to lack of strong demand," said Yoshimasa Maruyama, an economist at BNP Paribas.
"While downgrading its view on the economy last week, the BOJ stuck to its overall economic scenario," Maruyama said, referring to the central bank's view on sustained growth. Continued...







