Japanese manufacturers' mood soured in August to its lowest since 2013 when the central bank embarked on aggressive monetary easing, a Reuters poll showed, reflecting the pain caused by a rising yen and highlighting the huge task facing policymakers to generate growth.
The Reuters Tankan, which tracks the Bank of Japan's quarterly tankan survey, found the service sector's mood rose for the first time in five months, a sign of fragility rather than strength in private consumption that constitutes about 60 percent of the economy.
The monthly poll of 533 big and mid-sized firms on August 1-16, of which 275 responded, was taken just as Prime Minister Shinzo Abe unveiled new economic stimulus early this month, which appeared to have little impact on Japanese business morale.
The survey comes on the heels of data that showed the economy stalled in the second quarter as weak exports and a strong yen curbed capital expenditure.
With the yen near a seven-week high of around 100 to the dollar, exporters of cars and electronics complained about a profit squeeze, although a stronger currency also drives down the cost of imports.