Japan's Tankan survey down

TOKYO, April 1 (UPI) -- Business sentiment among major Japanese manufacturers plunged in the first quarter to its lowest since December 2003, the Bank of Japan reported Tuesday.

The central bank's closely watched Tankan survey showed the index fell to 11 from 19 in the earlier quarter ended December largely because of the slowdown in the U.S. economy and its global impact. The index for the 2003 quarter ended in December stood at 7.

The latest decline has caused more companies to become negative about raising capital investment, Kyodo news service reported.

It was also the second consecutive quarter of deterioration in business sentiment among large manufacturers and below the average market forecast of 13 in a Kyodo News survey.

The index for major non-manufacturers' sentiment stood at 12, down from 16 in the previous quarter.

The survey was conducted between Feb. 26 and March 31, and covered 10,705 companies, the report said.

The Tankan index is based on the percentage of companies reporting favorable business conditions less those reporting unfavorable conditions.

The Kyodo report said for the next quarter through June the index is projected to further deteriorate to 7, while that of non-manufacturers to inch up 1 point to 13.