(Restores dropped word in opening paragraph)
* Big manufacturers' sentiment +6 vs poll +8, pvs +6
* Non-manufacturers' sentiment +18 vs poll +18, pvs +19
* Big firms' FY2016 capex seen up 6.3 pct
By Leika Kihara and Tetsushi Kajimoto
TOKYO, Oct 3 Confidence among big Japanese
manufacturers was flat in the three months to September and
service-sector sentiment worsened to its lowest in nearly two
years, the Bank of Japan's closely watched tankan survey showed
on Monday, underscoring a fragile economic recovery.
Big firms plan to raise capital expenditure in the current
fiscal year, the tankan survey showed, offering some relief to
policy-makers hoping the Bank of Japan's aggressive stimulus
will boost business investment.
The results followed a mixed run of recent indicators that
underscored fragile growth, keeping the BOJ under pressure to do
more to hit its 2 percent inflation target - even as doubts grow
over whether years of massive money-printing are doing any good.
The headline index gauging big manufacturers' sentiment
stood at plus 6 in September, unchanged from three months ago
and roughly in line with a median market forecast of plus 7, the
quarterly survey showed.
Big non-manufacturers' sentiment slipped to plus 18 from
plus 19 three months ago, falling for three straight quarters
and hitting the lowest level since December 2014. Markets had
expected a reading of plus 18.
Big firms plan to raise capital spending by 6.3 percent for
this fiscal year to March from year-before levels, largely
unchanged from three months ago. Markets had expected a 6.8
Big manufacturers based their business plans on the
assumption the dollar would average 107.92 yen in the current
fiscal year, down from 111.41 yen forecast three months ago.
The revised level, however, is still much higher than recent
dollar/yen levels of around 101, suggesting that company
profits could be revised down.
The yen's gains are curbing prices of imported goods, which
may help boost household purchasing power but complicate the
task for the BOJ to accelerate inflation to its 2 percent
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
(Reporting by Leika Kihara and Tetsushi Kajimoto; Editing by