By Reiko Mizutome
Tokyo, March 5 (BridgeNews) - Grim sentiment is setting in among all sectors of Japanese business, the latest monthly BridgeNews "tankan" survey of corporate sentiment in Japan showed Monday. The worsening of all round sentiment in the March Bridge tankan the monthly survey of corporate sentiment in the world's second largest economy is unequivocal among both major manufacturers and other sectors of the economy.
The Bridge survey is closely watched because it mirrors the quarterly Bank of Japan Tankan, a survey that is more comprehensive, but less frequent than the Bridge survey.
Japan's corporate sentiment continued to sharply deteriorate in February, reflecting weaker exports and industrial production amid a slowdown in the U.S.
economy and declining stock prices in Japan.
The BridgeNews "tankan" survey of company planners showed that major corporations, especially exporters, were more pessimistic in February than they were in January.
The diffusion index, or net percentage of firms that see business conditions as favorable, fell to minus 10 in February from 1 in January for major manufacturers, following a sharp 14-point drop in January. The index or barometer of confidence for non-manufacturers edged by a lesser margin down to minus 7 in February from minus 6 in January. Still the poll showed that the barometer for major manufacturers is likely to improve to minus 1 in the next three months, but that for non-manufacturers it is expected to remain at minus 7.
The slowdown in the U.S. economy weighed on manufacturer sentiment, although the recent weakening of the yen is a positive factor for exporters.
On the Tokyo Stock Exchange on Monday the benchmark Nikkei 225 Stock Average managed to claw back from a near 16-year low, snapping a five-day losing streak as it gained 60.36 points, or 0.5%.
Many economists said the negative impact of the slowing U.S. economy was larger than they had expected.
In January, exports in terms of volume to the U.S. fell 12.1% on year, for the fifth straight decline, while those to Asia fell 1.5% on year, the first drop since March 1999.
In line with slowing exports, Japan's industrial production has deteriorated. Output fell 3.9% on month in January, equal to the largest ever decline, according to the Ministry of Economy, Trade and Industry.