Confidence among major Japanese manufacturers edged down in the three months to December, a quarterly central bank survey showed Monday, underscoring the lacklustre state of the world`s third largest economy.
The Bank of Japan`s closely watched Tankan survey showed confidence among large manufacturers stood at plus 12 against plus 13 in the September survey.
Economists had expected the reading would stay flat, according to a survey by the leading business daily Nikkei.
Confidence among non-manufacturing companies rose to plus 16 from plus 13, delivering mixed news to Prime Minister Shinzo Abe`s ruling coalition that scored a big win in Sunday`s snap elections.
"Today`s Tankan survey suggests that Japan`s economy stabilised in the fourth quarter, but a rapid recovery is not on the cards," Marcel Thieliant, Japan economist at Capital Economics, said in a note.
The Tankan survey of more than 10,000 companies -- marking the difference between the percentage of firms that are upbeat and those that see conditions as unfavourable -- is the most comprehensive indicator of how Japan Inc. is faring.
The central bank`s report came after government data showed the world`s third largest economy shrank 0.5 percent quarter-on-quarter in the three months to September following a 1.7 percent contraction in the June quarter.
The two consecutive quarters of negative growth met a common definition of a recession.
Abe over the past two years has pressed ahead with a pro-spending growth bid, dubbed "Abenomics", which boosted stock prices and pushed the yen down.
Abe moved ahead with a sales tax hike in April, Japan`s first in 17 years, which slammed the brakes on consumer spending.
