Japan business confidence sags

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JapanFactoryOutput Reuters.

Tokyo - Japanese business confidence has sagged since a sales tax hike in April, suffering the first deterioration in six quarters, a survey from the Bank of Japan showed Tuesday.

The Tankan survey, which covers the April-June period, showed confidence among large manufacturers stood at plus 12 after hitting a more than six-year high of plus 17 in the preceding quarter.

The reading represents the first decline since Prime Minister Shinzo Abe took office in late 2012.

The latest reading for large companies in the non-manufacturing sector tumbled to plus 19 from plus 24 in the March quarter, also the first downturn in six quarters.

The business sentiment index marks the difference between the percentage of firms that are upbeat and those that see conditions as unfavourable.

Plus figures mean there are more optimistic business managers than pessimistic ones.

The closely watched survey of more than 10,000 companies is the most comprehensive indicator yet of how Japan is coping with the impact of the nation's first sales tax rise in 17 years.

Consumer spending turned down after Japan raised its sales tax from 5.0 percent to 8.0 percent to help reduce a mountain of national debt. - Sapa-AFP

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