Japan manufacturing sentiment rises to 6-year high

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TOKYO (AP) — Business confidence at Japan’s majormanufacturers rose to a six-year high, according
to a quarterly centralbank survey released Monday, amid optimism over Prime Minister ShinzoAbe’s economic
recovery program.The Bank of Japan’s "tankan"business confidence index rose to 16 for large
manufacturers from 12 inSeptember, and the best showing since 2007. Abe has made monetaryeasing, public
works projects and structural reforms the key planks ofhis three-pronged economic plan, dubbed
"Abenomics."The yen hasfallen dramatically after he took office a year ago, which helps
Japan’sautomobile and electronics exporters by increasing overseas income whenrepatriated. The bank surveyed
10,509 companies, which respondedbetween Nov. 14 to Dec. 13.But economists say Japan still faces major
economic challenges, including a bulging public debt and shrinking population.Largecompanies said they
expect to increase capital spending by 4.6 percentin the fiscal year through March 2014. That was slightly
lower thanexpected, said Hiromichi Nishi, assistant general manager at SMBC NikkoSecurities."So the
effect is mixed and subdued," he said.Thesentiment index among non-manufacturing companies,
includingconstruction and services, jumped to 20 from 14, according to thesurvey.The "tankan"
showed that they are expecting the dollar totrade at mid-90 yen levels, but it has been rising to about 100
yenlately, meaning earnings results could turn out better than expected,Nishi said.Still, analysts say Japan
needs drastic structural reforms to keep solid growth going.Copyright 2013 The Associated Press. All
rightsreserved. This material may not be published, broadcast, rewritten orredistributed.

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