×

Japan's December tankan survey shows big manufacturers index +12

Robot assembler work on cars during the assembly process at Nissan Motor Company's Kyushu Plant on November 23, 2007 in Kiyakyushu, Japan.
Getty Images
Robot assembler work on cars during the assembly process at Nissan Motor Company's Kyushu Plant on November 23, 2007 in Kiyakyushu, Japan.

Confidence at big Japanese manufacturers held steady in the three months to December but is seen worsening ahead, a closely watched central bank survey showed on Monday.

The headline index for big manufacturers' sentiment stood at plus 12 in December, unchanged from three months ago, the Bank of Japan's quarterly "tankan" survey showed. That compared with the median estimate of plus 11 in a Reuters poll of economists.

Big firms plan to raise capital spending by 10.8 percent in the fiscal year that ends in March, compared with their previous plan for a 10.9 percent increase and with economists' median estimate of a 10.2 percent expansion.

The tankan's sentiment indexes are derived by subtracting the number of respondents who say conditions are poor from those who say they are good. A positive reading means optimists outnumber pessimists.

Hidenobu Tokuda, senior economist at Mizuho Research Institute, said that although sentiment was firm in December, the overall tone of the survey indicated companies were taking a cautious stance on the future.

"This reflects concerns about emerging markets. This is also due to concerns about the domestic economy, because consumer spending has been somewhat disappointing," he said.

"Capex forecasts seem strong, but companies are lowering plans for the first half of the fiscal year and raising spending plans for the second half of the fiscal year, which suggests some companies are delaying investment.

"I think the economy will continue to recover, but the pace will be slow because we are still in an inventory adjustment phase. I think the BOJ could ease in January as wages are not likely to rise fast enough to satisfy the BOJ's price target."

Follow CNBC International on Twitter and Facebook.