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According to the latest monthly Reuters Tankan survey, released on Tuesday, the Japanese business sentiment improved slightly in the four months to August, but risks remained skewed to the downside due to the coronavirus pandemic-led slow economic recovery.

Key findings

The poll, which tracks the Bank of Japan’s (BOJ) closely watched “tankan” quarterly survey, pointed to a modest recovery, with manufacturers’ morale seen somewhat less negative in the coming months.

Tuesday’s survey found that the mood of manufacturers rose to minus 33 in August from minus 44 the previous month, its highest since February. The service-sector gauge was at minus 23 from minus 26.

Though the overall mood remained pessimistic, all industry categories but oil refinery/ceramics were less gloomy than in the previous month.

Manufacturers’ sentiment was seen recovering further to minus 22 in November, while that of service-sector firms was expected to drop to minus 26, according to the poll of 495 large- and mid-sized non-financial companies, of which 232 firms responded, on condition of anonymity.

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