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REPEAT: MNI 5 THINGS: BOJ Sep Tankan: Senti Down, Capex Solid

MNI (London)
Repeats Story Initially Transmitted at 00:27 GMT Oct 1/20:27 EST Sep 30
--BOJ Sept Diffusion Index For Major Manufacturers +19 vs +21 In June
     TOKYO (MNI) - The Bank of Japan's quarterly Tankan business survey for
September, released Monday, showed business sentiment lower for the third
straight quarter, hit by increasing concerns over the global economy and rising
raw material costs.
     Looking ahead, sentiment among major companies is expected to be flat three
months ahead, although many sectors are expected to fall further on jitters over
protectionist U.S. trade policies. Labor shortages in Japan are also pushing up
costs, adding to supply constraints.
     On the plus side, business investment plans remain solid for fiscal 2018 as
many firms are seeking to ease production capacity constraints and firms are
absorbing high costs through increased productivity.
     The average dollar/yen exchange rate assumed by major manufacturers for
fiscal 2018 (beginning Apr 1) was Y107.40, compared with Y107.26 seen in the
June survey.
     The diffusion index is calculated by subtracting the percentage of
companies reporting deteriorating business conditions from the percentage of
those reporting an improvement. A positive figure indicates the majority of
firms see better business conditions.
     The key points from the survey:
     * The diffusion index for sentiment among major manufacturers posted the
3rd straight quarter-on-quarter drop, falling to +19 in September from +21 in
June, hit by higher energy and raw material costs as well as concerns over
global demand. The index was slightly weaker than the MNI survey median forecast
of +21. The index is projected to be unchanged at +19 in December.
     * The sentiment index for major non-manufacturers marked the first drop in
two quarters, falling to +22 in June from +24 in June, in light of sluggish
domestic demand. It was in line with the MNI survey median forecast for +22. The
index is projected unchanged at +22 three months ahead.
     * The September sentiment index for smaller manufactures was unchanged from
June at +14 (the MNI survey median forecast was +13). The index is expected to
slip to +11 in December. The sentiment index for smaller non-manufacturers stood
at +10 in September, up from +8 in June. The index is projected to slump to +5
in the next poll.
     * Business investment plans by major firms, the key to a pickup in domestic
demand, are projected to rise 13.4% on year in the current fiscal year, slightly
revised down from +13.6% seen in the June survey and below the MNI survey median
economist forecast for a 14.2% rise. Capex plans by smaller firms are expected
to fall 8.4% in fiscal 2018, revised up from -11.8% in June and weaker than the
MNI survey median forecast of -5.4%.
     * The levels of capital investment plans by both large and smaller firms in
the current fiscal year are close to their historical averages.
--MNI Tokyo Bureau; tel: +81 90-2175-0040; email: hiroshi.inoue@marketnews.com
--MNI London Bureau; tel: +44 203-586-2225; email: les.commons@marketnews.com
MNI London Bureau | +44 203-865-3812 | les.commons@marketnews.com
MNI London Bureau | +44 203-865-3812 | les.commons@marketnews.com

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