'Business confidence falls'

Agence France-Presse, Tokyo

Japan's central bank said Monday its latest Tankan survey showed business confidence to September fell for the third consecutive quarter, with the large manufacturers' index plunging to minus 33 from minus 16.

In the September survey, the index of large non-manufacturers' confidence skidded to minus 17 from minus 13 in April-June, the Bank of Japan said.

Figures for the past three months offer the first indication of business sentiment in Japan since the deadly terrorist attacks in the United States, with a portion of the data collected after Sept.11.

The Nikkei-225 average of the Tokyo Stock Exchange dropped on the news, taken as confirmation that confidence in Japan Inc. was deteriorating fast, dealers said.

The headline index fell 1.5 percent in the first 18 minutes to trade at 9,624.40 points at 9:18 am (0018 GMT or 7.18 a.m. Jakarta time).

"The Tankan survey squarely reflected deteriorating business sentiment in Japan, dragging down stock prices from the opening," said Tatsuo Kurokawa, senior market analyst at Nomura Securities.

"The survey underscored growing economic concern as investors are trapped in uncertainty over the U.S. and Japanese economies."

Reaction on the foreign exchange market was limited as most players had already expected grim figures for July-September, dealers said.

The dollar traded at 119.48-51 yen at 9:00 am (0000 GMT or 7 a.m. Jakarta time) in Tokyo, against 119.55 yen just before the Tankan was released.

"There was a muted reaction from the numbers with no specific movement," said HSBC foreign exchange manager Takedo Uda, adding that the figures, although bad, were not far out from expectations.

Boardroom gloom was rife throughout Japan with the index of small-sized manufacturers' confidence plummeting to minus 47, down from minus 37 in the previous survey and small non- manufacturers' also slipping to minus 37 from minus 31.

As a detailed study of Japanese businesses and their plans for the months ahead, the quarterly Tankan survey is the central bank's key source of data for planning.

The indices measure the difference between firms saying economic conditions are favorable and those saying they are not. A negative figure means a majority of firms believe conditions are unfavorable.