Japanese Business Sentiment Improves In August

Japanese business sentiment improved in August and is likely to remain stable, according to a Reuters poll, giving signs of economic recovery and improvement in sentiment as companies ignore the drop in exports and consumer spending slowed in the second quarter. The Reuters Tankan survey can relieve policy makers are under pressure to launch a fresh stimulus to trigger growth after the second quarter GDP data were negative on Monday. The poll shows business managers showed an optimistic attitude cautious about rising levels of domestic demand, despite a slowdown in China, Japan's largest trading partner, interrupting outlook.

Mood retailers rebound from a sharp decline the previous month, which triggered a rise in the services sector at large. Sentiment manufacturing sector reached the highest level in a year, supported by processed food manufacturers, oil refineries, and steel producers as the decline in oil prices and other commodities. Reuters Tankan sentiment index for the manufacturing sector rose from 14 to 17 in August, the highest level since reaching 20 last year. Index is expected to continue to rise to 19 in November. Services sector index rose 3 points to 27, after dropping from a record high of 36 in July, and is expected to be stable in November.