The business mood of Japan's big manufacturers sank to a near seven-year low in the fourth quarter, a closely watched central bank survey showed, as the U.S.-China trade war and soft global demand weighed on the export-reliant economy.
Companies expect conditions to remain unchanged or even worsen three months ahead, the Bank of Japan's tankan quarterly survey showed, suggesting that the fallout from the trade conflict could hurt broader sectors of the economy.
But there were some bright signs. Nonmanufacturers' sentiment appeared to weather the hit from October's sales tax hike, with companies maintaining robust capital expenditure plans — reinforcing market expectations that the BOJ will hold off on expanding stimulus at next week's rate review.