"Things are getting better. It doesn't matter whether it's at the capex [capital expenditure] level or consumer sentiment [levels]. You see it in so many sectors, not just big end consumption like increased golf club memberships, but at the low-end as well," Nicholas Weindling, a fund manager at J.P. Morgan Asset Management told CNBC Asia's "Squawk Box."
"People are spending more on every day items like rice balls. You see capex signs going up because profits are up 50 percent this year; companies have the flexibility to spend more where they want to," he added.
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Sentiment among big firms in the services sector also improved, with the big non-manufacturers index rising 6 points to plus 20 in the three months to December, above forecasts for a reading of plus 16.
Still, sentiment among Japanese corporates was cautious with regards to the outlook. The Tankan survey showed that big firms in the manufacturing and non-manufacturing sectors expect business conditions to worsen slightly in the three months to March.
"Business sentiment is expected to weaken by March, reflecting some caution about the rise in the consumption tax rate," said Masayuki Kichikawa, managing director and chief Japan economist at Bank of America Merrill Lynch.
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