— Japan MOF: Q4 Major Firm Sentiment -2.5 Pt Vs Q3 +6.6 Pt
— Japan MOF: Q4 Sentiment Projected at +8.1 Pt In Q3 Poll
— Japan MOF: Major Firm Sentiment Seen Q1 +1.1 Pt, Q2 +1.7 Pt
— Japan MOF: FY11 All Firm Capex Plans +0.7% Vs Q3 Poll +5.4%
— Japan MOF: FY11 All Firm Current Profit -2.0% Y/Y Vs Q3 +2.8%

TOKYO (MNI) – The business sentiment diffusion index for major
Japanese firms tumbled to -2.5 points in the October-December quarter
from +6.6 points in the previous quarter amid the global slowdown and
the strong yen, prompting many to slash profit forecasts and capital
investment plans, a quarterly government survey showed on Friday.

In the previous survey released in September, the index for the
fourth quarter of 2011 was forecast to improve to +8.1 points from +6.6
points.

The index is computed by subtracting the percentage of companies
reporting deteriorating business conditions from the percentage of those
reporting an improvement. A positive figure indicates the majority of
firms see butter business conditions.

The latest survey also showed that major firms’ sentiment is
expected to rebound to +1.1 points in the first quarter of 2012 and
further to +1.7 points in the second quarter.

The survey showed that companies expect their combined capital
spending to rise only 0.7% in fiscal 2011, down from a 5.4% increase
projected in the September poll.

Manufacturers plan a 2.8% hike in spending on factories and offices
in the current fiscal year, down from a 9.0% increase seen in the
previous survey, while non-manufacturers forecast a 0.7% reduction in
capex, down from a 3.0% rise projected three months earlier.

The survey showed firms’ current profits will fall 2.0% in fiscal
2011, down from a 2.8% rise forecast in the previous survey.

The Finance Ministry and the Cabinet Office conducted their joint
survey on Nov. 15, covering 15,354 companies capitalized at Y10 million
or over, of which 12,128 replied.

The yen hit a fresh life-time high of Y75.32 on Oct. 31, prompting
the Bank of Japan, on behalf of the Ministry of Finance, to spend more
than Y9 trillion to buy dollars to weaken the value of the yen.

tokyo@marketnews.com
** Market News International Tokyo Newsroom: 81-3-5403-4835 **

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