3 Min Read
* Manufacturers sentiment index -17, non-manufacturers +10
* Outlook buoyed by PM Abe's drive for BOJ easing, weak yen
* Reuters Tankan highly correlates with BOJ tankan
By Tetsushi Kajimoto and Izumi Nakagawa
TOKYO, Jan 24 (Reuters) - Sentiment among Japanese manufacturers improved for a second straight month and is expected to turn into a positive reading in the coming few months, a Reuters poll showed, providing some evidence that the economy is crawling out of a mild recession.
The poll of 400 firms, of which 266 responded during Jan. 8-21, comes as new Prime Minister Shinzo Abe rolled out an economic stimulus package and the yen weakened in expectations of bold monetary easing by the Bank of Japan.
The BOJ doubled its inflation target to 2 percent on Tuesday and made an open-ended commitment to buy assets from next year after weeks of relentless pressure from Abe for a greater push to lift an economy out of deflation.
The Reuters Tankan, which closely correlates with the BOJ's key quarterly tankan survey, also showed the mood among non-manufacturers, including retailers and construction firms, rose for the second consecutive month and is seen rising further in April.
"Consumer sentiment shows some signs of improvement due to the weakening yen and rising share prices from around when the new administration was launched (in December), although the mood has not fully recovered yet," one construction firm said.
An electric machinery maker said: "The Japanese economy appears to be resuming a pick-up although it may be too early to attribute it to Abe's calls for strong monetary easing and a correction in the strong yen."
In the Reuters Tankan, the manufacturers' sentiment index rose by a point to minus 17 in January, up two points from the lowest level in three years registered in November.
The index, derived by subtracting the percentage of pessimistic responses from optimistic ones, is expected to jump to plus 1 in April, meaning that optimists outnumber pessimists.
The rise is driven by gains in sectors including chemicals, oil refinery, steel, electric machinery and metal products.
The index for non-manufacturers rose five points to plus 10 and it is seen rising further to plus 18 in April, led by sectors such as wholesalers, real estate and construction, which could benefit from reconstruction after the March 2011 disaster.
The latest Reuters Tankan points to improvement in the BOJ's March tankan from December when it showed big manufacturers' mood slid for two straight quarters.
Analysts expect exports and the broader economy will pick up gradually along with the global recovery, helped by the yen's weakening due to BOJ easing and Abe's aim of more expansionary fiscal and monetary policy.
Abe's cabinet approved this month $117 billion spending in the biggest stimulus since the global financial crisis.