* June manufacturers’ sentiment index -46 vs May -44
* Service-sector index -32 in June vs May -36
* All but one sub-sector’s sentiment negative
* Businesses see slightly less negative mood further ahead
By Daniel Leussink
TOKYO, June 17 (Reuters) - Worries about the deepening impact of the new coronavirus kept Japanese business confidence depressed in June, as firms braced for a prolonged global economic downturn, the Reuters Tankan survey showed on Wednesday.
The monthly poll, which tracks the Bank of Japan’s key tankan quarterly survey, found manufacturers’ mood turned more gloomy, though both manufacturing and service-sector firms expected slightly less pessimistic conditions in the three months ahead.
The sentiment index at manufacturers dropped to minus 46 in June from minus 44 the previous month, remaining at the lowest since June 2009, while the service-sector gauge edged up to minus 32 from minus 36, according to the Reuters Tankan poll. A negative figure means pessimists outnumber optimists.
“Orders have fallen to around 70% due to global economic stagnation caused by the spread of the new coronavirus,” a manager at a transport equipment maker wrote in the survey.
A manager at a real estate firm said: “Business conditions are extremely poor as housing acquisition sentiment was sluggish after the sales tax hike, and new business didn’t hold up due to the coronavirus.”
The Bank of Japan kept monetary settings steady at its policy meeting on Tuesday, sticking to its view the world’s third-largest economy will gradually recover from the impact of the coronavirus pandemic. It made no change to a range of programmes put in place to channel funds to businesses, adding it expects to pump around 110 trillion yen ($1 trillion) to the economy via its market operations and lending facilities.
Last Friday, Japan’s parliament approved a record $300 billion second extra budget to finance part of an economic stimulus package of $1.1 trillion to combat the fallout from the crisis.
The survey showed manufacturers’ sentiment in September at minus 35 and that of service-sector firms at minus 29 as some respondents saw improving conditions in the electronics sector.
“Demand for semiconductors, especially for memory, is expanding,” a manager at an electrical machinery maker wrote in the survey.
Except for the information/communications sector, all industry categories across manufacturing and services were gloomy about business conditions, according to the poll of 499 large- and mid-sized non-financial companies, of which 240 firms responded on condition of anonymity. ($1 = 107.5800 yen) (Reporting by Daniel Leussink; Editing by Jacqueline Wong)